Lawsuit claims lending giant blacklists, strong-arms honest appraisers.
SEATTLE, Oct. 16 /PRNewswire/ -- A group of Idaho appraisers today filed a
class-action lawsuit against Countrywide (NYSE: CFC) claiming the company used
strong-arming tactics to intimidate appraisers to generate reports in line
with Countrywide's business objectives.
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The lawsuit, filed in U.S. District Court in Seattle, claims Countrywide
forced appraisers to use improper appraisal techniques that benefit the lender
and punished those who did not participate by blacklisting individuals and
companies for up to a year, denying them work.
Countrywide, the largest home mortgage lender, has the reach and influence
necessary to affect an appraiser's business if they fail to follow the
company's guidelines, the suit claims. The lawsuit claims Countrywide's
actions caused substantial damage to thousands of appraisers on top of
distorting real estate prices in the marketplace.
'The integrity of real estate appraisals is more important than ever and
time and time again Countrywide is showing its customers and partners that it
only cares about profits and market control,' said Steve Berman, managing
partner at Hagens Berman Sobol Shapiro. 'The bottom line is our nation's at a
breaking point where we can't take anymore corporate dishonesty in the home
market -- role Countrywide's becoming notorious for.'
The lawsuit claims Countrywide's interest lies in property passing
appraisals its way, rather than determining whether an appraisal is fair and
accurate and in accordance with industry standards (Uniform Standards of
Professional Appraisal Practice or USPAP).
'We believe if an appraiser doesn't 'play ball' with Countrywide and
produce a report affirming the value Countrywide expects, it places the
appraiser on its 'Field Review List,' or blacklist, which it then sends to
mortgage brokers who hire appraisers,' said Berman.
As of Aug. 28, 2008, more than 2,000 appraisers appeared on the Field
Review List and Countrywide's been using the blacklist practice for more than
four years, according to the complaint.
The suit claims that to further complicate matters, any appraisal
submitted to Countrywide from a blacklisted appraiser automatically goes to
LandSafe, a subsidiary of Countrywide, for review.
