Courtesy of The Bradenton Herald
October 30, 2012
Upon learning of issues inside the Willowbrook condo
community in East Manatee, a former Dallas home appraiser is imploring Florida
government officials to investigate possible fraudulent practices by national
home builder KB Home.
Kyle Lagow, who worked for Landsafe Inc., a company owned by Countrywide
Financial that provided loans for KB Home sales, recently received a $14.5
million settlement for his role in a whistleblower lawsuit involving KB Home.
The case, brought by Seattle-based law firm Hagens Berman Sobol Shapiro, alleged
fraudulent practices were committed by Countrywide Financial, which was acquired
by Bank of America between 2004 and 2008.
The suit claimed Countrywide conspired with Landsafe and KB Home to inflate the
appraised value of homes to increase loans to homebuyers. The allegations
sparked an investigation that resulted in a $1 billion settlement between the
Department of Justice and Bank of America.
"In my opinion, in many cases the values were manipulated, the homeowners are
unnecessarily upside down on their value, the statutes will pass, and the
homeowners will be saddled with a higher than necessary debt," Lagow told the
Herald via email.
The thought of unfair closing prices on their homes is another blow to the 80 or
so residents in the 272-unit community in East Manatee that have construction
issues with their homes. The construction problems have led
to water damage, floor damage and signs of mold due to water intrusion on the
second and third floor balconies and inside their homes.
"It just adds to the debacle," said Don Koehler, a Willowbrook resident. "In
this process, every corner we turn, they try to cover something up or we hit a
dead end. They've created the perfect storm."
Over the last two months, Manatee County building inspectors have inspected
close to 80 balconies in the condominium community and have ruled about 40
Reports have surfaced of two whistleblower lawsuits against KB Home that alleged
the home builder knew of structural defects in Willowbrook, but sold the units
anyway. Both lawsuits have been settled.
On Tuesday, Manatee County commissioners will hear a report from county building
officials on whether the county's building inspection system worked properly.
The county commission public meeting begins at 9 a.m.
Several residents have asked KB Home to buy back their units, but the
multi-billion dollar company has shown no interest in doing so. KB Home is
standing by its warranty and weeks ago reached an agreement with the Willowbrook
Condominium Association to allow a third party to make repairs at the expense of
KB Home. Repairs have already begun inside the community, according to Cara
Kane, spokeswoman for KB Home's Central Florida division.
At Landsafe, an appraisal company owned by Countrywide, Lagow witnessed
violations of Federal Housing Administration laws.
He also claimed KB Home manipulated final home sales prices and used
intimidation and blacklisting tactics toward appraisers that didn't inflate
Manatee County is proposing state legislation that would essentially void
mandatory arbitration clauses in contracts for the sale and construction of
Willowbrook residents said arbitration clauses were included in their contracts
with KB Home, prohibiting them from suing the developer for poor construction.
In addition, State Sen. Mike Bennett requested the Florida Attorney General look
into possible fraudulent practices by KB Home.
The Attorney General's office has since referred complaints against KB Home to
the Florida Department of Business and Professional Regulations.
"Someone has to have some sort of backbone and take this and run with it,"
Koehler said. "The homeowners are exhausted."