A former home appraiser will receive $14.5 million as part of a whistleblower lawsuit that accused subprime lender Countrywide Financial of inflating appraisals on government-insured loans, his attorneys said Tuesday.
Kyle Lagow’s lawsuit sparked an investigation that culminated in a $1 billion settlement announced in February between Bank of America Corp. and the U.S. Justice Department over allegations of mortgage fraud at Countrywide, his attorneys said in a news release. Bank of America bought Countrywide in 2008.
Lagow’s suit was one of five whistleblower complaints that were folded into the $25 billion national mortgage settlement that state and federal officials reached with Bank of America and four other lenders this year. His suit was unsealed in February, but the amount of his settlement had not been disclosed.
Gregory Mackler, a whistleblower who challenged Bank of America’s handling of the government’s HAMP mortgage modification program, has also finalized a settlement, said Shayne Stevenson, an attorney with the Hagens Berman law firm, which represented both whistleblowers. Stevenson declined to comment on Mackler’s settlement amount.
The complaints were brought under a whistleblower provision in the U.S. False Claims Act, which allows private individuals with knowledge of wrongdoing to bring suits on behalf of the government and share in the proceeds of any settlement.
Both Lagow and Mackler lost their jobs after raising concerns about practices at their companies and faced difficult times awaiting settlements, Stevenson said. Lagow, who worked in a Countrywide appraisal unit, filed his suit in 2009; Mackler, who worked at a firm called Urban Lending Solutions, brought his case in 2011.
“These guys are inspirational,” Stevenson said. “They both did the right thing. The should inspire other people to come forward.”
Bank of America declined to comment. A spokesman for the U.S. Attorney’s Office in the Eastern District of New York, which handled the Bank of America settlement, also declined to comment.
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