A company that provided real estate appraisals to a former mortgage lending giant during the run-up to the housing crisis will pay $7.8 million to settle charges that its appraisers conspired with the lender to puff up home values.

The settlement resolves charges brought by New York's attorney general against eAppraiseIT, a unit of CoreLogic (CLGX), that allegedly allowed its appraisers to inflate property values at the behest of Washington Mutual on more than 10,000 homes in New York, the attorney general announced Friday. The company handled appraisals for the savings and loan over a roughly two-year period beginning in 2006

The appraisals allowed sales of the homes to close at higher values and enabled Washington Mutual to originate more mortgage loans than would have been possible had the appraisals been performed by fully independent appraisers, the attorney general charged in the case, which went to trial in June. Washington Mutual was the largest U.S. savings and loan before it collapsed in in September 2008 and was taken over by JPMorgan Chase (JPM). Chase is not a defendant in the case.

"Coercion of appraisers to inflate home values and the erosion of appraisal independence directly contributed to the housing crisis," Attorney General Eric Schneiderman said in a news release. "By giving in to lender pressure, these corporations violated a principle that is vital to restoring and maintaining a healthy housing market."

The settlement concludes one of the few cases from the mortgage meltdown brought to trial. Schneiderman' s predecessor, Andrew Cuomo, who later became New York's governor, sued First American Corp., the former parent company of eAppraiseIT, in 2007. CoreLogic, a spin-off of First American, later changed the name of eAppraiseIT to CoreLogic Valuation Services before announcing in May plans to close the unit and leave the appraisal business.

"We are glad to have put this matter behind us," CoreLogic spokeswoman Alyson Austin told American Banker. "The case involved a single customer relationship of one remote subsidiary that ended nearly five years ago."

Schneiderman co-chairs the Residential Mortgage-Backed Securities Working Group, a combined federal-state task-force formed in January to probe misconduct in the mortgage market. He said recently his office would pursue people who broke the law in the packaging and sale of securitized products, and that he expects his federal counterparts to do the same.

Shares of CoreLogic fell 1.13%, to $26.36, in trading Friday morning.

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