Hagens Berman: Class-Action Lawsuits Against KB Home Expand to Florida, North Carolina and South Carolina; Lawsuit cites similar claims to California and Arizona complaints, alleging price inflation scheme
ORLANDO, Fla. – (PRNewswire) A Central Florida homeowner forced into foreclosure filed a class-action lawsuit last week against KB Home, Countrywide Financial and LandSafe Appraisal Services. The homeowner alleges that 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.
This is the third lawsuit Hagens Berman Sobol Shapiro's (HBSS) filed against KB Home, Countrywide and LandSafe. The other lawsuits represent homeowners in California, Arizona and Nevada.
"Since we filed the first lawsuit in May, we've heard from homeowners and industry insiders who have validated our conclusions that Countrywide and LandSafe were gaming the system, causing thousands of homeowners to overpay for their home purchases by tens of thousands of dollars," said Steve Berman, managing partner of HBSS.
"No one wants to learn they overpaid for a home, and certainly not because the builder and the appraiser rigged the game," Berman noted.
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 suit claims all KB Homes in the Southeast segment were targeted by the scheme. The complaint states between 2006 and 2008 more than 19,000 homes were delivered to the area. At an average price of $225,000 a home, and conservatively assuming an average inflated appraisal of $30,000 per home, that amounts to almost $600 million in inflated contract prices, the suit states.
"The appraisal is a critical step in the home-purchasing process, designed to be an independent evaluation of the property's value," Berman added. "We allege that KB and LandSafe dealt from the bottom of the deck, robbing homeowners of millions of dollars."
The lawsuit lists several claims against the defendants including violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), violation of California unfair competition law, violation of Florida deceptive and unfair trade practices act, unjust enrichment and violations of Real Estate Settlement Procedures Act (RESPA).
The lawsuit represents anyone who used Countrywide and LandSafe to finance a home purchased through KB Home in Florida, South Carolina or North Carolina. To join this case, homeowners can contact attorneys by visiting www.hbsslaw.com/kbhomes, e-mailing kbhomes@hbsslaw.com or calling (206) 623-7292.