New York Attorney General Andrew Cuomo announced on Wednesday that his office was sending subpoenas to Fannie Mae and Freddie Mac as part of his expanding probe of the home mortgage industry.

The subpoenas seek information on the mortgage loans that the two companies purchased from banks, including Washington Mutual, Cuomo said.

The two government-sponsored enterprises also have agreed to a demand by Cuomo that they retain an independent examiner to conduct a review of all Washington Mutual appraisals and mortgages purchased by the companies, Cuomo said.

Last week, Cuomo sued First American Corp and one of its units for allegedly colluding with Washington Mutual, known as WaMu, to inflate the appraisal values of homes. WaMu, the largest U.S. savings and loan, was not named as a defendant.

In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual's mortgages have not been corrupted by inflated appraisals, the attorney general said in a statement.

The subpoenas also seek information on the due diligence practices of Fannie Mae and Freddie Mac, and their valuations of appraisals, he said.

Washington Mutual stock was down nearly 13 percent, falling $3.13 to $21.10, on the New York Stock Exchange. Fannie Mae stock was down 7.8 percent at $51, while Freddie Mac was off 5.5 percent at $46.70, also on the NYSE.

In a statement, Fannie Mae said that it would cooperate fully with Cuomo's probe.

It is against our interest to purchase or guarantee mortgages with inflated appraisals, and so it is in Fannie Mae's interest that these appraisal practices be investigated, the company said.

Neither Freddie Mac nor Washington Mutual was immediately available for comment.

Cuomo was Secretary of Housing and Urban Development under U.S. President Bill Clinton. The development is the latest outcome of Cuomo's ongoing, nine-month probe into the mortgage industry.

Fannie and Freddie are known as government-sponsored enterprises because the publicly traded firms also hold federal charters to add liquidity to the homes market and contribute to affordable housing.

The lawsuit filed last week against First American, brought in New York Supreme Court, alleged that the company and its real estate appraisal subsidiary, eAppraiseIT, violated appraiser independence laws.

In its mortgage investigation, the New York attorney general's office has sent hundreds of subpoenas and has uncovered fundamental flaws in two areas of the market -- appraisals and securitization of mortgage loans, officials have said.

(Additional reporting by Martha Graybow and Joseph Giannone)

Freddie mac New York Fannie mae