Appraisers' Free Forum

Nov. 7 (Bloomberg) -- New York Attorney General Andrew Cuomo subpoenaed Fannie Mae and Freddie Mac as he expanded his investigation into ``widespread'' collusion between real estate appraisers and lenders including Washington Mutual Inc. to inflate home values.

Cuomo is seeking information on home loans purchased by Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing. Some loans may have been based on fraudulent appraisals, he said. Cuomo also subpoenaed investment banks that he declined to name.

The attorney general said he uncovered a ``pattern of collusion'' between lenders and appraisers and he is targeting banks beyond Seattle-based Washington Mutual. Fannie Mae and Freddie Mac agreed to supply documents and hire an independent examiner to evaluate loans they bought from WaMu, Cuomo said. A suit filed last week against First American Corp. said the company artificially boosted appraisals to secure WaMu's business.

'We're going to do another case this week,' Cuomo said in Washington today, although he declined to offer any specifics. 'We will be making other cases in the coming weeks, which will also be making points on systemic flaws.'

Cuomo said Fannie and Freddie agreed to appoint an independent examiner to probe their dealings with WaMu, with an eye toward the appraisal process

WaMu shares tanked last week after Cuomo sued a unit of title insurer First American