New York State Attorney General Andrew Cuomo and the GSEs (Fannie Mae and Freddie Mac) are near a deal on appraisal fraud and self dealing (see also here):

At its core, the deal would bar lending companies that sell loans to Fannie and Freddie from using preferred or internal appraisers who may be subject to pressure to overvalue properties. The deal would establish a “home valuation protection code” to set standards on compensation and independence issues, and it would create an institute with a separate board of directors to monitor complaints from consumers and appraisers, according to documents described to The Washington Post by a source not authorized to speak publicly about the issues.

If the agreement takes hold, Fannie and Freddie would no longer purchase mortgages from lenders who fail to abide by the standards, a powerful economic force that could influence the entire housing landscap

As Tanta of Caluclated Risk so eloquently puts it, “It appears that Fannie Mae has finished or nearly finished its review, and is about to ruin several very large aggregators’ and thousands of pissant brokers’ day with a new set of rules regarding how appraisals can be obtained and what affiliations between lender and appraiser are acceptable.”