Class-action lawsuit against bank dismissed

On behalf of The Rollins Law Firm posted in Foreclosure on Wednesday, September 11, 2013.

In a case that impacts homeowners in Mississippi and across the nation, a class-action lawsuit against Bank of America for failing to help homeowners with loan modifications was rejected by a federal judge on Sept. 4 after she said the claims were not similar in nature. The Massachusetts District Court judge expressed sympathy for the foreclosure woes of the homeowners and their struggles with bureaucracy but said too many different questions surrounding each party's individual attempt to obtain a modification disqualified the lawsuit from proceeding as a class action.

The denial by the court is another blow against those pursuing class action lawsuits, in light of a 2011 Supreme Court decision making it more difficult for groups to sue companies. An attorney who was representing the plaintiffs expressed his disappointment on the behalf of thousands of homeowners and said that many of them won't be able to seek legal redress on their own.

A second attorney for the plaintiffs said they plan to appeal the case. The lawsuit involved 43 individuals and couples from 26 different states who took legal action against the nation's second largest bank.

Introduced in 2009, the Home Affordable Modification Program was designed to offer banks incentives to provide loan modifications. In June, several former employees of the financial institution signed sworn documents that said the bank was offering bonuses of cash and gift cards to employees who lied or delayed the HAMP applications. The bank wanted employees to convince customers to ask for an in-house loan modification or let the residence go into foreclosure because that was more profitable for the bank, which has denied the accusations.

When a homeowner can't keep up with payments, they may need to speak to a bankruptcy attorney. Bankruptcy lawyers may be able to help clients seek financial protection against creditors and delay the foreclosure process.

Source: Reuters, "U.S. Judge rejects BofA mortgage modification class action", Jonathan Stempel, September 05, 2013

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