California Real Estate Fraud Report

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Whistleblower Finally Receives His Reward for Reporting Countrywide Appraisal Fraud

Kyle Lagow is a hero and now, after suffering for his integrity, he’s about to be rewarded for it.

Lagow was formerly an appraiser for subprime mortgage lender Countrywide Financial. He had reported two areas where he was sure there was appraisal fraud:

First, LandSafe, Inc., a subsidiary of Bank of America, had been pressuring both in-house and independent contractor appraisers to inflate the values of properties, not only to ensure that sales closed, but to increase commissions for loan officers.

Second, Lagow was certain that homebuilder KB Home, which was in a joint venture with Bank of America, cherry-picked appraisers who would cooperate with inflating home values, also appraisal fraud.

Lagow emailed former Countrywide CEO Angelo Mozilo after his supervisors failed to address his concerns. Mozilo assigned Countrywide’s COO, Jack Schakett, and its chief compliance officer, Richard Wentz to look into the matter but they replied there was no basis for Lagow’s complaint after “investigating” it.

Six months after being fired in November 2008, Kyle Lagow heard about a False Claims lawsuit against KB Home being filed on behalf of home buyers by the Seattle-based law firm of Hagens Berman. He found out he had a whistleblower‘s case, filed his own lawsuit and later was interviewed by prosecutors in the U.S. Attorney’s Office in the Eastern District of New York. Investigators not only verified there had been appraisal fraud but also that Countrywide had had issues in its underwriting of FHA loans (loan which allow consumers to purchase a home with only 3.5% down-payment).

Lagow’s share of the settlement of the whistleblower case against Bank of America, which purchased Countrywide in 2008, is $14.5 million before taxes and legal fees. After being blacklisted as an appraiser and suffering severe financial repurcussions, he certainly deserves it.

Bank of America must pay $500 million to the Federal Housing Administration (that’s YOU, the taxpayer) as restitution and fund a loan modification program for Countrywide borrowers whose loan balances exceed the worth of their properties.

Read the original article on the Linesch Law Firm website.

© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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