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A California investor filed a potential class action lawsuit Friday in Boise's federal court against Eagle River Mortgage of Eagle and First Horizon Home Loan Corporation regarding loans involving Teton Springs, a development near Victor in eastern Idaho.
A complaint filed for Scott Read, of San Jose, Calif., who agreed to purchase one of the properties with promises that he could make hundreds of thousands of dollars on a quick sale after it was built, says First Horizon and Eagle River knowingly utilized and endorsed fraudulent appraisals to justify home-lot purchases that exceeded the real value of the properties. As a result, borrowers were stuck with loans in excess of what the properties were worth, the complaint says.
The lawsuit claims these actions violated federal anti-racketeering statutes and amount to common law fraud under Idaho law.
Read's lawsuit is asking for damages and seeks class action status on behalf of other borrowers in the same situation.
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