A class-action lawsuit has been filed against Countrywide claiming the company used strong-arm tactics to intimidate appraisers to generate reports in line with Countrywide's business objectives. The lawsuit 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 further claims that Countrywide's actions caused substantial damage to thousands of appraisers on top of distorting real estate prices in the marketplace.
The suit also alleges that 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). Further, Countrywide has engaged in placing appraisers on a 'blacklist' and has done so for more than 4 years. As of Aug. 28, 2008, more than 2,000 appraisers appeared on the Field Review List, Countrywide's blacklist, which it sends to mortgage brokers who hire appraisers, according to the complaint.
Further complicating matters, any appraisal submitted to Countrywide from a blacklisted appraiser automatically goes to LandSafe, a subsidiary of Countrywide, for review, the suit alleges. LandSafe's role is to find problems within the appraisal and reconfirm to Countrywide the report isn't accurate -- rendering it unusable because it doesn't fall within Countrywide's guidelines, the complaint claims.
The lawsuit also alleges that LandSafe is a captive puppet of Countrywide, enabling the lending giant to push its alleged unethical business practices into markets across the country.
