- May 25, 2002
- Professional Status
- Certified Residential Appraiser
LOS ANGELES - Two California couples are suing KB Home and mortgage lender Countrywide Financial Corp., claiming the companies schemed with real estate appraisers to inflate prices paid for homes as the housing market began to tank.
The complaint, filed Wednesday in Los Angeles Superior Court, also names as a defendants KB Home Mortgage Co., Countrywide Home Loans Inc., Countrywide KB Home Loans — a joint venture of Countrywide and the builder — and two real estate appraisers.
In the lawsuit, the couples claim prospective homebuyers were presented with false or misleading data on previously sold homes in order to justify higher asking prices on new purchases.
KB customers were presented with comparable sales data from homes that were dissimilar, nowhere near the KB property being sold, or from sales that had not yet closed, according to the lawsuit.
When independent appraisers evaluated comparable home sales, the values were between 10 percent and 15 percent lower than the price the plaintiffs paid for their KB homes, the lawsuit claims.
"People like Debbie Bolden lost up to 15 percent before they ever opened their front doors," plaintiffs' attorney Peter Fredman said in a statement. "We believe that these practices propped up falling prices into the summer of 2006 at least."
The complaint suggests the alleged scheme likely affected other KB customers.
"Inflated closed-sale prices resulting from the fraudulent appraisals, in turn, infected subsequent appraisals and valuations, allowing KB Home to continue to obfuscate falling values and obtain prices inflated well beyond where they would have been in the absence of this unlawful price manipulation," according to the lawsuit.