WASHINGTON, D.C. - A few days after filing his first lawsuit over the issue, New York Attorney General Andrew Cuomo on Monday gave his thumbs-up to legislation that will protect consumers against intimidating techniques allegedly used by appraisers.
Cuomo says the Escrow, Appraisal and Mortgage Servicing Improvements act will help clean up recent troubles in the housing industry.
"My office's investigation of the housing market has found systematic conflicts of interest in the appraisal industry that clearly necessitate legislation," Cuomo said. "Government regulation can help the marketplace by providing protections for investors and consumers alike."
The bill is sponsored by Rep. Paul Kanjorski (D-PA), the Chair of the House Financial Services, Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee.
"Rep. Kanjorski's bill is a big step forward in remedying some of the bad practices that have led to the foreclosure crisis facing our nation today, and I applaud his efforts," Cuomo said.
Cuomo filed suit last week against eAppraiseIT, one of the nation's largest real estate appraisal management companies. He claims the company, a subsidiary of First American Corp., joined in a scheme with Washington Mutual to use a list of preferred "Proven Appraisers" who intentionally inflated appraisals.
Kanjorski's bill will prohibit the coercion or intimidation of appraisers, create strong penalties against violators ($10,000 per day for a first violation and up to $20,000 for following violations) and provide borrowers the right to obtain a free copy of the appraisal of their property fi they are taking a high-cost mortgage.
"(A)s an industry-wide problem, the foreclosure crisis demands an industry-wide solution," Cuomo said. "That's why this new legislation is such an important first step toward ending the abuses in the housing market nationwide."