The New York State Court of Appeals ruled that Attorney General Eric Schneiderman could pursue a lawsuit that accuses California-based First American Corp. and its former eAppraiseIT unit of colluding with Washington Mutual to inflate home values. According to Reuters, the ruling, issued today, ensures that federal law does not preclude individual states from pursuing claims of fraud against real estate appraisers.

In 2007, then-New York State Attorney General Andrew Cuomo filed the suit against the three parties, alleging they violated laws that attempt to ensure independent real estate appraisals. [more]

1. Half-finished Brooklyn condo just one of many stalled city projects
[NYDN]
2. “Super Size Me” director Morgan Spurlock shops for a house in Park Slope
[NYMag]
3. National sales hurt as lenders hold homes in foreclosure
[NYT]
4. U.S. cracks down on loan security
[WSJ]
5. Cousin of George W. Bush octuples his investment in Soho penthouse
[NYO]
6. Police supervisor recieves threat over Hamptons’ beach vendors decision
[Patch]
7. More on Eric Schneiderman’s mortgage investigations
[WSJ]
8. A sneak peak at Union Square’s new Pavilion restaurant
[Curbed]
9. Media frenzy outside Dominique Strauss-Kahn’s 71 Broadway digs
[WNYC]
10. Meanwhile, building manager tries to reassure residents at Strauss-Kahn’s temporary residence
[WSJ]
[more]

New York Attorney General Eric Schneiderman is intensifying his investigation of the mortgage crisis that spurred the recession by requesting records from major Wall Street banks, according to the Associated Press.

Schneiderman has also arranged meetings with representatives of Bank of America, Morgan Stanley and Goldman Sachs Group to discuss the nature of mortgage securities operations during the boom. Schneiderman is concerned that packaging mortgages into securities to be purchased by investors may have helped disguise risky loans, according to a source close to the investigation. [more]

100 Eleventh AvenueFrom the February issue: Outside, a late-January snowstorm has left a delicate frosting on the
shimmering gray-green jumble of steel and glass that is 100 Eleventh
Avenue, making the newly constructed condo tower all the more
eye-catching in the flat winter light.
Inside, however, fat drops of water fall from the ceiling, forming a
puddle on the polished-granite floor of the Jean Nouvel-designed lobby.
Todd Eberle, a photographer who lives on the fourth floor, eyes the leak with concern.
“I don’t know what that’s about, but it’s not good,” he says.
A photographer-at-large for Vanity Fair who has spent much of his
career shooting architecture, Eberle is an avowed Nouvel devotee. They love their new apartment, its terrace with views of Frank
Gehry’s IAC Building, and the way changing patterns of light dance
across the floor.
Yet Eberle is one of a number of residents voicing concerns about the building. [more]

Rector Place and Yair Levy

Embattled developer Yair Levy and his son-in-law Daniel Deutsch are facing a $20 million lawsuit from unit owners at the Rector Square condominium, alleging they failed to complete construction and pay common charges as well as illegally converted funds at the property, all before the building was foreclosed on by Anglo Irish Bank.

The suit, filed Dec. 13 in New York State Supreme Court, claims that residents of the 304-unit building, at 225 Rector Place, have been unable to refinance, sell or get approval for any financial transactions at the building due to Levy defaulting on nearly $165 million in loans at the building, which led to the 2009 foreclosure. [more]

From left: Andrew Cuomo, Rector Square and Yair Levy

A state Supreme Court judge ruled today that Attorney General Andrew Cuomo can proceed in his civil suit against developer Yair Levy, who is facing banishment from future condominium unit sales after he allegedly misappropriated millions of dollars from the Rector Square reserve fund.

Cuomo sued Levy, alleging that the man formerly known as the “condo king” illegally withdrew $1.6 million in reserve funds at the 303-unit building in Battery Park City, and signed over checks to family, while using the money to pay credit card bills at Macy’s and Verizon Wireless.
[more]

Co-op and condominium buyers have more leeway to pursue legal action against developers, according to Crain’s, following a New York Appellate Division ruling last week. The ruling, which related to a suit against JPMorgan Chase in which the plaintiff claimed the defendant committed gross negligence, superseded a law that typically allows only the attorney general to file class action suits in regard to securities. The law, known as the Martin Act, has forced tenants in the past to go through the attorney general’s office to instigate legal action against their developer, according to real estate attorney Steven Sladkus of Wolf Haldenstein Adler Freeman & Herz. [more]

AG Andrew Cuomo

Attorney General Andrew Cuomo is seeking information from four major mortgage servicers — Bank of America, JPMorgan Chase, Wells Fargo and GMAC Mortgage — concerning the practice known as “robo-signing” in home foreclosure proceedings, he announced today. Cuomo called on mortgage servicers engaged in robo-signing to immediately suspend all foreclosure actions in the state, including evictions and foreclosure sales. He is also requesting that the mortgage servicers not file any new foreclosures until they correct their procedures. “I will not allow New Yorkers to lose their homes due to mortgage goliaths that buck the system by submitting affidavits signed without knowledge of the facts,” Cuomo said. “Such conduct is a fraud upon our courts and a slap in the face of New Yorkers struggling to get by in this economy.” Tens of thousands of New Yorkers have been affected. Foreclosure rates in Nassau and Suffolk counties rank among the 10 highest in the nation. More than 60,000 New York homes are currently in foreclosure, and 130,000 New York homeowners have received pre-foreclosure notices this year after falling behind on their mortgage payments. TRD

[more]

From left: Gary Barnett and AG candidate Eric Schneiderman

New information about contributions to Attorney General contender Eric Schneiderman’s campaign are raising eyebrows, according to the New York Daily News. Developer Gary Barnett, the president of Extell Development, who earlier this year unsuccessfully sued the Attorney General’s office after it ordered refunds for 41 condo buyers at the Rushmore, has donated $10,000 to Schneiderman’s campaign. But Schneiderman, a current State Senator, says that accepting this donation doesn’t constitute a slap in the face toward current AG Andrew Cuomo. Campaign spokesperson James Freedland said that if Extell chooses to appeal the decision, Schneiderman would “return this contribution in order to avoid even the appearance of impropriety.” [NYDN]

[more]

AG Andrew Cuomo

Attorney General Andrew Cuomo announced a settlement today with Pinnacle Security Group, a Utah-based company that used deceptive door-to-door sales tactics to trick close to 4,000 New York homeowners into signing contracts for unnecessary services. The attorney general’s investigation revealed that Pinnacle’s door-to-door sales staff often targeted homeowners who had existing contracts with other security companies. In a deceptive practice known as “slamming,” Pinnacle made false representations to convince people to sign up for their products even though the consumer had a contract with another home security company. Pinnacle misled homeowners into believing that their existing home
security provider had gone out of business, had merged with Pinnacle or was in some way already affiliated with Pinnacle. Homeowners were then stuck paying for redundant monthly services from two security companies, including upwards of $50 per month for Pinnacle. Those who tried to void the contract were faced with cancellation fees. The settlement requires Pinnacle to provide full compensation to all New York consumers who signed up with the company since January 2008 and were subject to deceptive sales practices. The company must also pay a $150,000 penalty and reform its sales practices. TRD

[more]