New York Court Allows Lawsuit Over Bogus Home Appraisals

New York’s highest court allowed the state Tuesday to proceed with a lawsuit that had accused First American Corp. and its eAppraiseIt unit of colluding with the former Washington Mutual Inc. to fraudulently inflate home values.

The Court of Appeals rejected the defendants’ argument that federal law precluded the state from pursuing claims alleging fraud and violations of real estate appraisal independence rules. It upheld a June 2010 ruling by an intermediate state appeals court.

The eAppraiseIt unit is now part of CoreLogic Inc., which was created when First American split last year into that company and First American Financial Corp.

(Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick)