Home appraisal code faces legal battle

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Trouble is brewing for a home appraisal code created by New York Attorney General Andrew Cuomo, meant to discourage inflated appraisals that have been blamed for contributing to the mortgage meltdown. Appraisers have long said they are pressured into inflating appraisals by loan officers and mortgage brokers whose pay is tied to the number of deals they close. Cuomo threatened to sue government-sponsored mortgage giants Fannie Mae and Freddie Mac earlier this year. After Cuomo alleged that they failed to ensure that appraisers were protected from pressure to inflate estimates, Fannie and Freddie agreed to a code that would take effect Jan. 1. The mortgage industry is considering legal action to prevent the code from becoming the de facto national standard. 

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