ALBANY, N.Y. — New York Attorney General Andrew Cuomo’s subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac sent another shock into the home mortgage industry, where he said conflicts of interest are costing consumers thousands of dollars because of inflated appraisals.
On Wednesday, Cuomo said he wants to know about loans Fannie Mae and Freddie Mac purchased from banks, including Washington Mutual Inc.
The subpoenas also seek to find out how the government-sponsored companies handle appraisals to see if lower-income homebuyers were stuck with loans based on inflated appraised values.
“In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual’s mortgages have not been corrupted by inflated appraisals,” Cuomo said.
