Home-buyers sued KB Home in Phoenix federal court Thursday, claiming the builder conspired with Countrywide Financial to inflate appraisals for home sales in Arizona and Nevada.
The class-action suit focuses on home sales in the two states since 2006, alleging Los Angeles-based KB Home steered home buyers to Countrywide, which then steered them to LandSafe Appraisal Services, a wholly owned subsidiary of Countrywide. LandSafe then used appraisers who would arrive at inflated values by selecting properties that weren't comparable, relying on pending sales instead of completed sales, and using false statements about the housing markets in Arizona and Nevada, the suit alleges.
As background to the case, the suit cites two California cases where appraisals came in at allegedly higher values. In one of those cases the appraiser relied on false comparable sales to achieve a higher closing price.
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