Wednesday, November 4, 2009

Another Class Action Suit Filed - AMC Related

Well, well, well. Isn't this appropriate? On the same day a bill is introduced in the Florida House of Representatives to regulate Appraisal Management Companies, Hagens Berman Sobol Shapiro, LLP, files a class action suit against KB Home, Countrywide and LandSafe alleging a widespread and complicated inflation scheme. One of the major players in the alleged scheme is LandSafe, an unregulated Appraisal Management Company, owned by Countrywide.

From the Press Release:

ORLANDO, FL - A Central Florida homeowner forced into foreclosure filed a class-action lawsuit last week against KB Home (NYSE: KBH), Countrywide Financial and LandSafe Appraisal Services, claiming the three conspired to rig housing prices in Florida, South Carolina and North Carolina, costing home purchasers millions of dollars, and fueling the collapse of the region's housing market.

The suit, filed in U.S. District Court in Orlando, Fla. on Friday, October 30, claims the three companies employed a well-planned scheme to control the typically independent appraisal process, jacking up home values, which, in turn, were used to determine the value of other homes sold by KB, affecting thousands of homeowners.
According to the 94-page complaint, Countrywide funneled all its KB customers' home appraisals to a single person at LandSafe, an appraisal subsidiary of Countrywide, who in turn would deliver an appraisal value at whatever KB and Countrywide ordered.

The complaint is 94 pages. For the appraisers reading this, the allegations made against the parties are nothing new. We have been watching this going on all around us, sounding the alarm and clamoring for someone, some entity, some regulator, to reign these bastages in.

Read it all RIGHT HERE

Appraiser Active mentioned another HBSS suit HERE. That one makes allegations against Wells Fargo and its appraisal subsidiary Rels Valuation. Isn't it interesting how the banks and their AMCs can game the system and dig deep into consumer's pockets and wallets?

- Mary Shanklin of the Orlando Sentinel offers some additional details and statements from KB Homes.
"It was common practice for builders and subdivision developers to have pet appraisers," Gregoire said. "That was true not only for subdivisions but also for builders within a subdivision or development — and, in particular, for condo converters."