Calif. homeowners file class action against KB Home, affiliates - Los Angeles Business from bizjournals:

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The lawsuit lists identical claims to a suit filed in Arizonalast month. Homeowners claim KB Home and the otherd defendants inflated home pricesz by as muchas $300 million in Californis alone. The suit filed by Seattle-based Hagensw Berman Sobol Shapiro claimd that between 2006and 2008, KB built more than 15,0000 homes in California at an averag selling price of and each home had an inflate appraised value of about $20,000. "KB and Countrywide created an opportunity where the companieas could control every aspect ofa buyer's real estate transaction," said Stevs Berman, lead attorney and managing partner at HBSS.
"The defendants essentially created a black hole inthe process, whers they could rig and falsify appraisals and home sale valuee and customers had absolutelyu no idea." According to the 75-pagre complaint, Countrywide funneled all its KB customers' home appraisalzs to one person at LandSafe, an appraisal subsidiary of Countrywide who in turn would deliver an appraisalp value at whatever KB and Countrywide These individuals were under direct instruction to valu e homes at or above the contract even if it meant violating regulator y guidelines and requirements, the suit claims.
The suit says that in two KB Home sampled appraisals were inflatefby $48,000 and $52,000 per property. The suit includes allegationsd of a second scheme with Countrywidee and its subsidiaryappraisal arm, LandSafe. The suit alleged LandSafe outsourced appraisal work to some individual appraisers and forced appraiserw to accept payment belowmarkegt value. LandSafe then charged plaintiffs upwardsof $400 for servicew when the company completed no work of its own, the suit According to the KB Home ran into similat appraisal problems in 2005 when it settled with HUD for $3.2 milliobn to resolve an investigation into the company'zs underwriting violations.
The HBSS lawsuit claimsd violations of the Racketeer Influence and Corrupt Organizations Act and violation of California unfaircompetition law. Los Angeles-baseed KB's major markets in California include communities inSan Fresno, Los Angeles and Ventura, Orange County, Riverside, Sacramento, San San Diego, Oakland and Stockton.