New York - AG Cuomo: Appraisers To Blame For Inflate Of Subprime Mortgages.
New York - 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, contributing to the subprime mortgage crisis.
Cuomo announced a 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.
Driven by a hungry market for bonds backed by home loans, mortgage lenders expanded subprime lending dramatically in 2005 and 2006. In many cases, they made loans to people at low initial “teaser” rates, which reset substantially higher one to three years later at levels some borrowers couldn’t afford.
“The independence of the appraiser is essential to maintaining the integrity of the mortgage industry,” Cuomo said, citing several e-mails between the companies’ executives. [wabc]
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