I’m no lawyer, but I’d imagine it would be difficult suit to win. “I bought a house I couldn’t afford at the peak, and now I want someone else to pay for it.”
I guess their arguement hinges on the claim that the builder knew the appraisal was too high. Even if it’s true, it sounds very difficult to prove in a court of law.
Of course, it might be more cost-effective for the builder to settle rather than go to court.
