Mortgage Loan Whistleblower Awarded $14.5 Million
Apply for a Loan
Secured with SHA-256 Encryption
UPDATED: May 30, 2012
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
The attorneys for Kyle Lagow, the former home appraiser who accused Countrywide Financial of inflating appraisals on government-insured mortgage loans, said that he will receive $14.5 million from the recent settlement reached with the lender.
Lagow worked as an appraiser for a subsidiary of Countrywide from June 2004 to November 2008, and revealed Countrywide’s practice of fraudulently inflating appraisals so that they collect more money from the government on FHA-backed mortgage loans.
Due to Lagow’s testimony, the U.S. Justice Department opened a large investigation of Bank of America Corp., who consumed Countrywide in 2008 after mortgage loan defaults ran rampant, which resulted in a $1 billion settlement.
While Lagow’s portion of the settlement was awarded in February, the amount he received remained undisclosed until now.
Lagow was one of five whistleblowers that contributed to the $25 billion national mortgage settlement that officials reached with Bank of America, Wells Fargo, JPMorgan Chase, Ally/GMAC, and Citi earlier this year.
The five whistleblowers brought their complaints to light under the U.S. False Claims Act, which grants certain protection to individuals with knowledge of corporate wrongdoings, such as the crime of mortgage loan fraud.
The False Claims Act contains a “qui tam” provision, which allows people who are not affiliated with the government to file suit on behalf of the government. Consequently, the qui tam provision also allows whistleblowers to collect a percentage of the recovery that results from their lawsuit. Lagow received his $14.5 million payout as a result of the qui tam provision.
While Lagow and some of the other whistleblowers lost their jobs for revealing wrongdoings within their companies, the support they’ve received from others has been immense.
“These guys are inspirational,” said Shayne Stevenson, an attorney with the Hagens Berman law firm, to Reuters. “They both did the right thing. They should inspire other people to come forward.”