Bank of America Mortgage Holders Lose Bid to Sue as Group
By Don Jeffrey & Janelle Lawrence
Bank of America Corp. (BAC) can’t be sued by unified groups of homeowners in different states over its failure to modify mortgages, a federal judge in Boston ruled.
Home-mortgage borrowers in 26 states claimed in lawsuits that Bank of America mismanaged loan requests under the Home Affordable Modification Program and sought class-action status to pursue their cases. The suits were consolidated in Boston.
“Plaintiffs’ claims may well be meritorious; but they rest on so many individual factual questions that they cannot sensibly be adjudicated on a classwide basis,” U.S. District Judge Rya Zobel said in a decision dated yesterday.
Bank of America is one of many mortgage lenders participating in the U.S. government’s mortgage-modification program, known as HAMP, designed to prevent mortgage foreclosures. The homeowners who sued claimed they made all required trial payments under the plan to the bank and still didn’t receive permanent loan modifications or written denials of eligibility by a certain date.
Jerry Dubrowski, a spokesman for Charlotte, North Carolina-based Bank of America, didn’t immediately respond to an e-mail seeking comment on the ruling. Steve Bermanand Thomas Sobol, lawyers for the plaintiffs, also didn’t immediately respond to e-mails.
The case is In re Bank of America Home Affordable Modification Program Contract Litigation, 10-02193, U.S. District Court, District of Massachusetts (Boston).
To contact the editor responsible for this story: Michael Hytha in San Francisco at mhytha @bloomberg.net