NEW YORK (Associated Press) - New York State Attorney General Andrew Cuomo unveiled what his office called "a major development in his ongoing investigation of the mortgage industry" at 11 a.m. EDT Thursday.
Cuomo is one of several state attorneys general who, along with the Securities and Exchange Commission, is investigating how the industry handled mortgages for people with risky credit, leading up to the collapse of the subprime mortgage market. Click here for the full complaint
According to (Reuters): New York Attorney General Andrew Cuomo said on Thursday that he has sued First American Corp (FAF.N: Quote, Profile , Research) and one of its units for allegedly colluding with Washington Mutual Inc (WM.N: Quote, Profile , Research) to inflate the appraisal values of homes, helping trigger the mortgage market meltdown.
The lawsuit was filed in New York Supreme Court, Cuomo said in a news release. Washington Mutual was not named as a defendant in the case, according to the attorney general's statement.
First American subsidiary eAppraiseIT "caved to pressure" from Washington Mutual to use a list of preferred appraisers who provided inflated home appraisals, Cuomo's statement said. Click here for the full article
According to Bloomberg.com : Cuomo conducted a nine-month investigation and the evidence against First American is ``damning,'' he said. It includes e- mails between executives at the appraisal company and Washington Mutual that show eAppraiseIT ``willingly violated'' state and federal regulations that call for independent home appraisals.
Andrew Cuomo is quoted in the Bloomber.com article: "The independence of the appraiser is essential to maintaining the integrity of the mortgage industry,'' Cuomo said. ``First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike.'' Click here for the full article.
According to MSN Money: In a conference call, a First American lawyer said the company had been cooperating with the attorney general on the investigation, and said the company 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.
WaMu denied Cuomo's charges. Click here for the full article
Related Articles:
WaMu suspends relationship w/ First American unit eAppraiseIT following NY suit
NY Attorney General Cuomo - Mortgage Industry Probe - NY AG sues First American unit
Recent Comments