New York's Court of Appeals cleared the state attorney general to investigate allegations that the title insurer First American Corp. and its eAppraiseIT unit inflated property appraisals under pressure from a client, Washington Mutual.

The state's top court said federal regulations do not preempt state claims alleging fraud and violations of real estate appraisal rules.

In 2007, then-New York Attorney General Andrew Cuomo brought a civil suit alleging the practice contributed to the subprime mortgage crisis.

Washington Mutual, a thrift company based in Seattle, collapsed in 2008.

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