Rick Rothacker, Reuters

For nearly three years, as Kyle Lagow struggled to find work and his finances crumbled, he kept a secret from nearly everyone he knew, including his wife: He was a whistleblower.

Lagow had filed a suit against his former employer, subprime mortgage lender Countrywide Financial, alleging appraisal fraud. He couldn’t discuss the case, filed under seal, until this year when he was awarded $14.5 million for his role in sparking a $1 billion settlement with Countrywide’s current parent, Bank of America Corp (BAC.N).

“You have to sit there in silence, and you just get up every day and beat your head against the wall,” Lagow, 50, said in a recent interview.

The settlement has brought Lagow financial security and a measure of redemption. But it was a long, hard path. And even after his travails, he fears little has changed in the mortgage industry.

Lagow’s suit, first filed in May 2009, was one of five whistleblower cases folded into the broader $25 billion mortgage settlement reached in February with Bank of America and four other lenders. The suits were brought under the U.S. False Claims Act, a Civil War-era law that targets those who swindle the government. Under the law, successful cases can earn whistleblowers between 15 and 25 percent of a settlement.

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