WaMu appraisal company settles with New York

* eAppraiseIT accused of inflating home appraisals

* Agrees to pay $7.8 million to end lawsuit

* eAppraiseIT now part of CoreLogic Inc

* NY AG Schneiderman took case to trial

* Schneiderman to bring new mortgage-related action soon

By Karen Freifeld

NEW YORK, Sept 27 (Reuters) – A company accused of inflating home appraisals under pressure from Washington Mutual Inc before the housing crisis agreed to pay $7.8 million on Thursday to settle with the New York attorney general.

EAppraiseIT, a unit of CoreLogic Inc, resolved the charges with New York Attorney General Eric Schneiderman while on trial.

The case, filed in New York state court in 2007, is one of the few related to the housing meltdown that the government has brought to trial. The trial was in recess when the settlement was reached.

Schneiderman is co-chair of the federal mortgage fraud task force formed in January to probe actions that led to the financial crisis. He has said he plans to take legal action against other targets soon.

Homes that were appraised above their value, allowing mortgage companies to issue bigger mortgages, are among the causes cited by experts for the housing bubble and subsequent financial crisis.

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