Whistleblower Law Blog

Bank of America Whistleblower Awarded $14.5 Million False Claims Act Settlement for Challenging Bank’s Practice of Inflating Home Appraisals to Obtain Federal Loans

Kyle Lagow, a former employee of Countrywide Financial Corp., which was acquired by Bank of America in 2008, will receive a $14.5 million whistleblower award as part of the $1 billion False Claims Act settlement Bank of America (BoA) reached with the U.S. Department of Justice. The $1billion settlement that BoA reached with the federal government was part of a $25 billion national mortgage settlement reached between five mortgage lenders in February 2012.

Lagow filed his lawsuit in 2009 alleging that Countrywide terminated his employment because he raised concerns about Countrywide’s appraisal practices.  Law 360 writes that according to Lagow, “Countrywide [inflated] property appraisals for federal loans, [and as a result] FHA ended up insuring home mortgages under false pretexts, and the government ended up repaying lenders at falsely inflated amounts if borrowers defaulted.” Countrywide would pressure home appraisers to inflate home values so they could gain larger federal loans and gain a larger profit. They would pay these appraisers above-market fees and would reward appraisers that produce as many as 400 appraisals and reviews a month, a number that could not be achieved legally.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

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