Regulators revise pact with Fannie, Freddie

WASHINGTON (AP) — Federal and state regulators announced a revised pact Tuesday to reshape home appraisal practices as part of an agreement with mortgage finance companies Fannie Mae and Freddie Mac.

Widespread complaints of problems with inflated appraisals and their impact on the nation's housing market led New York Attorney General Andrew Cuomo to reach an initial pact in March with Fannie and Freddie on a plan to reform the troubled industry.

The original changes, however, brought complaints from bank regulators and mortgage industry officials, who said Cuomo was overstepping his authority and said the law would harm the industry.

Fannie and Freddie, government controlled companies, own or guarantee the lion's share of new U.S. home loans and have become especially dominant after the collapse of dozens of lenders that catered to borrowers with poor credit. Any changes made by the two companies impact the entire lending industry.