Court - Suit Against First American May Proceed

A state appeals court ruled that New York can proceed with its lawsuit accusing First American Corp. of inflating home values under pressure from Washington Mutual Inc.

According to a recently posted story, in a unanimous decision, presiding justice Luis Gonzalez wrote for a four-justice panel of the New York State Appellate Division:

 “The attorney general claims that defendants engaged in fraudulent, deceptive and illegal business practices by allegedly permitting eAppraiseIT residential real estate appraisers to be influenced by nonparty Washington Mutual,” presiding justice Luis Gonzalez wrote in today's unanimous decision. “We conclude that neither federal statutes, nor the regulations and guidelines implemented by the OTS, preclude the Attorney General of the State of New York from pursuing litigation.”

Additional stories HERE , HERE,  HERE and HERE.

EAppraiseIT gave in to demands for higher appraisals to secure more of Washington Mutual's business, Attorney General Andrew M. Cuomo said when he sued in 2007.  States including New York began investigations of the mortgage industry in 2007 as foreclosures rose nationwide.

This should be interesting.

HERE is the decision.

HERE is the Cuomo press release about the investigation.

In light of the language in H.R. 4173 that exempts bank owned/controlled AMCs from state regulation, isn't it interesting that First American (now Core Logic) is the partner with at least two big bank AMCs? First American is the alleged culprit in a huge fraud and now stands to benefit by escaping state attempts to regulate AMC activity.