Hagens Berman: Class-Action Lawsuits Against KB Home Expand to Florida, North Carolina and South Carolina

Hagens Berman: Class-Action Lawsuits Against KB Home Expand to Florida, North
Carolina and South Carolina
Lawsuit cites similar claims to California and Arizona complaints, alleging
price inflation scheme.

ORLANDO, Fla., Nov. 3 /PRNewswire/ -- A Central Florida homeowner forced into
foreclosure filed a class-action lawsuit last week against KB Home (NYSE:
KBH), Countrywide Financial and LandSafe Appraisal Services, claiming the
three conspired to rig housing prices in Florida, South Carolina and North
Carolina, costing home purchasers millions of dollars, and fueling the
collapse of the region's housing market.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080317/AQM144LOGO)

The suit, filed in U.S. District Court in Orlando, Fla. on Friday, October 30,
claims the three companies employed a well-planned scheme to control the
typically independent appraisal process, jacking up home values, which, in
turn, were used to determine the value of other homes sold by KB, affecting
thousands of homeowners.

This is the third lawsuit Hagens Berman Sobol Shapiro's (HBSS) filed against
KB Home, Countrywide and LandSafe alleging a widespread and complicated
inflation scheme. The other lawsuits represent homeowners in California,
Arizona and Nevada.

"Since we filed the first lawsuit in May, we've heard from homeowners and
industry insiders who have validated our conclusions that Countrywide and
LandSafe were gaming the system, causing thousands of homeowners to overpay
for their home purchases by tens of thousands of dollars," said Steve Berman,
managing partner of HBSS.

Berman noted that since the first suit was filed, he has heard from hundreds
of homeowners, many desperate to dig out of the financial hole the suit
contends KB and Countrywide put them in through the alleged scheme.

"No one wants to learn they overpaid for a home, and certainly not because the
builder and the appraiser rigged the game," Berman noted.

According to the 94-page complaint, Countrywide funneled all its KB customers'
home appraisals to a single person at LandSafe, an appraisal subsidiary of
Countrywide, who in turn would deliver an appraisal value at whatever KB and
Countrywide ordered.

The named plaintiff, Stephanie Sullivan, purchased her home in 2006 for
$426,000. An appraisal conducted a year later reported her home was worth
$310,000 and cited that the market was not the reason for the lower value but
rather an inaccurate and fraudulent appraisal.

In 2007, Sullivan's husband was laid off and they were unable to pay the
mortgage. The Sullivans tried to work with Countrywide to modify the loan but
the lending giant refused, filing a lien on the home and eventually
foreclosed, pushing the Sullivans into bankruptcy.

The suit claims all KB Homes in the Southeast segment were targeted by the
scheme. The complaint states between 2006 and 2008 more than 19,000 homes were
delivered to the area. At an average price of $225,000 a home, and
conservatively assuming an average inflated appraisal of $30,000 per home,
that amounts to almost $600 million in inflated contract prices, the suit
states.

"The appraisal is a critical step in the home-purchasing process, designed to
be an independent evaluation of the property's value," Berman added. "We
allege that KB and LandSafe dealt from the bottom of the deck, robbing
homeowners of millions of dollars."

In July 2005, KB settled an investigation with U.S. Department of Housing and
Urban Development (HUD) for $3.2 million. The payment settled 13 underwriting
violations found by HUD and resulted in the largest administrative penalty
payment in the agency's history.

One week prior to the announcement of the HUD settlement, KB announced it was
selling its mortgage arm to Countrywide and together the companies formed
Countrywide-KB, a joint venture that exclusively provides loans to KB home
purchasers, the suit states.

The lawsuit lists several claims against the defendants including violations
of the Racketeer Influenced and Corrupt Organizations Act (RICO), violation of
California unfair competition law, violation of Florida deceptive and unfair
trade practices act, unjust enrichment and violations of Real Estate
Settlement Procedures Act (RESPA).

The lawsuit represents anyone who used Countrywide and LandSafe to finance a
home purchased through KB Home in Florida, South Carolina or North Carolina.
To join this case, homeowners can contact attorneys by visiting
www.hbsslaw.com/kbhomes, e-mailing kbhomes@hbsslaw.com or calling (206)
623-7292.

About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is a nationally recognized class-action and
complex-litigation law firm based in Seattle with offices in San Francisco,
Chicago, Boston, Los Angeles and Phoenix. Among recent successes, HBSS
negotiated a $300 million settlement in the DRAM memory antitrust litigation,
the largest antitrust settlement in U.S. history, recovered $340 million on
behalf of Enron employees, and was part of the leadership team in the $3
billion Visa/MasterCard settlement. In pharmaceutical litigation, the firm's
recent successes include a $350 million settlement with McKesson, more than
$200 million with other parties in drug-pricing litigation, and a $150 million
settlement regarding Lupron. HBSS represented Washington and 12 other states
against the tobacco industry that resulted in the largest settlement in
history. For a complete listing of HBSS cases, visit www.hbsslaw.com.

SOURCE Hagens Berman

Steve Berman of Hagens Berman Sobol Shapiro, +1-206-623-7292,
Steve@hbsslaw.com; or Mark Firmani of Firmani + Associates, Inc.,
+1-206-443-9357, Mark@firmani.com, for Hagens Berman Sobol Shapiro