A lawsuit charges that builder KB Home and its exclusive mortgage lender, Countrywide Financial, misled customers into buying homes with inflated values, the Arizona Daily Star reported May 8. The proposed class-action lawsuit alleges that the companies conspired to inflate home values with a third company, LandSafe Appraisal Services, a wholly owned subsidiary of Countrywide. The claim was filed by homeowners in Arizona federal court but includes allegations about homes sold in Nevada as well.
According to the newspaper, the lawsuit alleges that LandSafe employed appraisers who were willing to inflate the values of homes to Countrywide's specifications. The appraisers would compare them to inappropriate properties and rely on untrue statements about the housing market in the area. This allowed KB Home to maintain high prices in a falling real estate market, the lawsuit said, giving both KB Home and Countrywide a higher profit at the expense of borrowers. The average appraisal was inflated by about $20,000 in as many as 14,000 homes, the claim said, suggesting that borrowers took out hundreds of millions in unnecessary loans.
This is the second class action predatory lending lawsuit for Countrywide, which in October settled a multi-state, multimillion-dollar claim alleging deceptive lending practices. That doesn't mean it's guilty as charged of the allegations in this lawsuit -- but as Buena Park predatory lending attorneys, we would not be surprised. Mortgages and home purchases are far too complicated for even well-educated people, and poor regulation has ensured that overly cozy relationships between lenders, appraisers, brokers and other players in the housing market are not closely scrutinized. In that environment, it would be easy for corruption to flourish.
At Howard Law LLP, we represent victims of predatory lending practices in lawsuits against the lenders that took advantage of them. Borrowers have many rights under state and federal law, including the right to full disclosure of loan terms. If you believe you were misled in any way when you purchased or refinanced your home, our Garden Grove predatory lending lawyers can help you cancel and nullify the unfair loan. In a Costa Mesa predatory lending lawsuit, you can win back the payments you made on the fraudulent loan, plus other costs and attorney fees.
Howard Law offers free, confidential consultations to all potential clients. To set one up, you should call us toll-free at 1-800-872-5925 or contact us online as soon as possible.