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Filed under the Racketeering Influenced and Corrupt Practices Act (RICO), the suit claims that Countrywide forces homeowners to use its wholly owned subsidiary LandSafe, for appraisals. The company then turns around and subcontracts the work to independent appraisers while charging homeowners as much as 200 percent of the actual cost of the appraisal.
The suit also contends that if independent appraisers do not accept Countrywide's fee structure or appraisal guidelines, they stand the risk of being blacklisted for further work by the industry giant.
The lawsuit, filed in U.S. District Court in
"As we investigated Countrywide for our clients, it was immediately
obvious that Countrywide is a well-oiled operation," said
The lawsuit claims LandSafe subcontracts much if its appraisal work to a
network of independent appraisers, but offers them rates as low as
The suit also claims that Countrywide, through its arrangement with LandSafe, has excessive influence on the appraisal process, designed to be an independent verification of a property's value.
"When you control the entire appraisal process, including your hands around the necks of appraisers financially speaking, you have a lot of influence," Berman added.
Berman noted that hundreds of thousands of homeowners have fallen prey to the alleged scheme.
The suit states that if appraisers fail to agree to the fee schedule set by LandSafe, their names appear on the Field Review List, a database of appraisers Countrywide refuses to use unless the mortgage broker also submits a report from a second appraiser.
Plaintiffs claim that Countrywide created LandSafe to guarantee a continual source of significant profit and control over the appraisal process.
The real estate market boomed from 2000 through 2006, allowing Countrywide to exert its will on appraisers, forcing them to lower fees for loans. Countrywide maintained market rates to its borrowers and kept the excess, all for no additional services rendered.
The plaintiffs,
However, according to the lawsuit, the Clarks never received an 'ABA
Disclosure' document. While Sound Value performed the appraisal, LandSafe
charged the Clarks
The lawsuit cites violations of federal law under RICO and RESPA. Other
counts include unjust enrichment, breach of fiduciary duty and violation of
You can learn more about this case by visiting http://www.hbsslaw.com/CFChomeowners.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in
CONTACTS: Steve Berman (206) 623-7292 Mark Firmani (206) 443-9357 Hagens Berman Sobol Shapiro Firmani + Associates Inc. Steve@hbsslaw.com Mark@firmani.com
SOURCE Hagens Berman Sobol Shapiro