Nov. 3, 2009 (PR Newswire) --

ORLANDO, Fla., Nov. 3 /PRNewswire/ -- 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.

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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 alleging a widespread and complicated inflation scheme. 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.

Berman noted that since the first suit was filed, he has heard from hundreds of homeowners, many desperate to dig out of the financial hole the suit contends KB and Countrywide put them in through the alleged scheme.

"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 named plaintiff, Stephanie Sullivan, purchased her home in 2006 for $426,000. An appraisal conducted a year later reported her home was worth $310,000 and cited that the market was not the reason for the lower value but rather an inaccurate and fraudulent appraisal.

In 2007, Sullivan's husband was laid off and they were unable to pay the mortgage. The Sullivans tried to work with Countrywide to modify the loan but the lending giant refused, filing a lien on the home and eventually foreclosed, pushing the Sullivans into bankruptcy.

The suit claims all KB Homes in the Southeast segment were targeted by the scheme.