STEVE INSKEEP, Host: NPR's Chris Arnold reports.</s>CHRIS ARNOLD: Probably the biggest underlying cause of the mortgage market crisis is a fundamental change in the industry. Banks used to hold on to loans so they didn't want to put you in a loan that couldn't pay, but now loans quickly get sold downstream to a series of other companies and investors so a lender can make a commission on a bad loan, sell it to somebody else, and it's not their problem.</s>ANDREW CUOMO: Attorney General Cuomo is demanding documents from Fannie Mae and Freddie Mac, two of the largest entities that buy mortgages from banks and lenders and resell them.</s>ANDREW CUOMO: So the subpoenas commence an investigation on Fannie and Freddie. We've also been investigating investment banks on the secondary market side; that goes on. Fannie and Freddie did agree to an independent examiner.</s>CHRIS ARNOLD: That examiner is going to be scrutinizing loans coming from one lender in particular, Washington Mutual. Cuomo alleges that the company illegally pressured home appraisers to inflate the value of homes in order to get more loans approved and spur business.</s>ANDREW CUOMO: Our belief is the appraisals in many cases were fraudulent, that there was wide-spread pressure on the appraisers to change the appraisals.</s>CHRIS ARNOLD: Chris Arnold, NPR News.
New York Attorney General Andrew Cuomo will subpoena the government-backed mortgage lenders Fannie Mae and Freddie Mac. Cuomo is investigating whether artificially inflated appraisals helped create the current subprime mortgage crisis.