Bank of America, which purchased Countrywide Financial Corp., will pay $250 million to settle a class action lawsuit alleging that Countrywide participated in a fraudulent real estate appraisal scheme. If approved, the settlement will end a nearly seven-year-old case that revolves around allegations that Countrywide, which Bank of America bought in 2008, and an affiliated appraisal vendor, schemed in the years leading up to the financial crisis to generate bogus, inflated appraisals in order to close as many home loans as possible.
The settlement provides that the estimated 2.4 million class members will not have to file claims forms to receive a cut of the $250 million common fund. The proposed settlement class is defined as U.S. residents who applied for a mortgage loan at the now-defunct Countrywide and whose properties were appraised by affiliated vendor LandSafe Inc. from 2003 through 2008.
The amount paid to each borrower will represent at least 22% of the appraisal fee taken by the defendants when assessing the mortgage applications, according to the filing.
The cases are Waldrup v. Countrywide Financial Corp. et al., case number 2:13-cv-08833, and Williams et al. v. Countrywide Financial Corp. et al., case number 2:16-cv-04166, both in the U.S. District Court for the Central District of California.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.