Countrywide Inflated Home Values: Whistleblower Suit

Law360, New York (February 24, 2012, 10:54 PM EST) -- A former Countrywide Financial Corp. employee says in a False Claims Act suit unsealed Friday in New York federal court that the Bank of America Corp. unit knowingly inflated property appraisals for Federal Housing Authority-backed loans.

As a result, FHA ended up insuring home mortgages under false pretexts, and the government ended up repaying lenders at falsely inflated amounts if borrowers defaulted, according to relator Kyle W. Lagow's complaint, filed in May 2009.

Since at least 2003, Countrywide and its affiliates “have continued to corrupt the...
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