Home appraisals are an essential part of the home buying process. An independent appraisal is a safeguard for both the purchaser and the lender – it is an unbiased look at the value of a property.

What happens, though, when you corrupt the process? What if a builder works in cahoots with a mortgage company who, by the way, owns an appraisal service?

If you read our lawsuits against home-building giant KB Home, Countrywide Mortgage and its appraisal subsidiary LandSafe, you will see that consumers – homebuyers – suffer.

For the past several months our firm’s kept a close eye on KB Home, specifically its lending and sales practices, and uncovered what we believe to be widespread fraud in Arizona, Nevada and California. Our suit contends the trio conspired to inflate appraisals, rig home values and allowed their partner, Countrywide to place homeowners in loans they didn’t qualify for and can’t afford.

The suit includes a list of tactics the group used to deliver predetermined appraisal values, including blatantly falsifying sale prices for comparable properties, using comparable properties that were as much as 10 miles away, and citing comparable properties that were in other planned communities.

When homeowners unknowingly overpay for their home they are under water from day one and the ramifications are long lasting and extremely damaging. Many don’t find out the extent of the damage until loan payments become too burdensome or they try to sell and realize they won’t be able to repay the loan through a sale based on an accurate and lower appraisal.

Since the announcement of our cases, we’ve heard from homeowners in these areas – all who are rightfully concerned about their homes and their loans – and the overwhelming response is a feeling of despondency that KB Home and Countrywide, companies they trusted, would so blatantly manipulate them for the sake of a sale.

Recently our firm’s taken on a large number of real estate focused lawsuits as the housing market started to collapse in 2006. This is the second lawsuit involving KB Home and the fourth naming Countrywide and LandSafe.

In the past two years, we’ve all learned a great deal about the distance both individuals and corporations are willing to go for the sake of profits. In our eyes, it’s appalling. These practices hinge on lies, corruption and collusion and ultimately end up hurting many.

KB Home rigged home values and as a result, lawsuits are now expanding into other areas. We believe we’ve just hit the tip of the iceberg with KB and will continue to investigate operations in other markets.

For now, we encourage any KB homeowners out there to share information about these lawsuits with friends and neighbors. We welcome your thoughts and comments here on the blog.

As the cases progress and we begin new investigations, we’ll keep you updated.