N.Y.’s Cuomo probes collusion between real estate appraisers, mortgage companies

first_imgAbout 265,000 loans to individuals and families over 18 months were subject to the inflated assessments, Cuomo said. The amount the assessments exceeded true values isn’t detailed in the lawsuit. But the e-mails show an early proposal would have increased assessments “5 percent with a cap of $50,000 if it is fully justified,” according to Cuomo. That plan was rejected for the list of “proven appraisers.”160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.“These blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market,” Cuomo said in a statement. “By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion.” Washington Mutual said Thursday it is suspending its relationship with eAppraiseIT and that it plans to further investigate the situation. “We have absolutely no incentive to have appraisers inflate home values,” Washington Mutual said in a release. “We use third-party appraisal companies to make sure that appraisals are objective and accurate.” In a conference call, a First American lawyer said the company had been cooperating with the attorney general on the investigation and it is “discouraged” by the decision to sue. “Now that we have a sense of the attorney general’s approach, we’re confident that once we’ve had the opportunity to set forth our response before an impartial arbitrator, our activities will be found appropriate,” said general counsel Ken DeGiorgio. ALBANY, N.Y. – New York Attorney General Andrew Cuomo said Thursday a major real estate appraisal company colluded with the nation’s largest savings and loan companies to inflate the values of homes nationwide, contributing to the subprime mortgage crisis. “This is a case we believe is indicative of an industrywide problem,” Cuomo said in a news conference. Cuomo announced the civil lawsuit against eAppraiseIT that accuses the First American Corp. subsidiary of caving in to pressure from Washington Mutual Inc. to use a list of “proven appraisers” who he claims inflated home appraisals. He also released e-mails that he said show executives were aware they were violating federal regulations. The lawsuit filed in state Supreme Court in Manhattan seeks to stop the practice, recover profits and assess penalties. last_img read more