An effort to consolidate 26 separate homeowner lawsuits against Bank of America hit a huge roadblock yesterday when a federal judge ruled that while the individual cases appear to have merit, they can not be heard as a group in a class action.
The complaints all involve allegations that Bank of America deliberately failed its obligation under the federal Home Affordable Modification Program (HAMP) to work with distressed homeowners to modify mortgages.
This is the suit that made headlines when several former BofA staffers went on the record, claiming it was bank policy to delay the mortgage modification process by “losing” documents and other shadowy tactics. Some of these employees also alleged that BofA would then go on “blitzes” to deny the backlog of modification requests it had created, and that staffers were rewarded for pushing homeowners into foreclosure.
The bank has repeatedly denied such claims, though it’s really only done so by bad-mouthing the former employees.
In spite of any evidence that there might have been systemic deception by the bank, the judge ruled that a “nearly endless series of individual questions” makes it impossible for the court to hear the cases as a consolidated class.
“This case demonstrates the vast frustration that many Americans have felt over the mismanagement of the HAMP modification process,” wrote the judge, expressing a degree of sympathy for the plaintiffs. “Plaintiffs have plausibly alleged that Bank of America utterly failed to administer its HAMP modifications in a timely and efficient way; that in many cases it lost documents, or pretended it had not received them, or arbitrarily denied permanent modifications.”
“It’s a sad outcome for many thousands of homeowners trying to obtain loan modifications,” a lawyer for the plaintiffs said after the ruling. “Very, very few of them will be able to pursue these issues on their own. Their one hope for justice was through the class mechanism.”
The plaintiffs plan to appeal.
Bank of America is, of course, celebrating this ruling.
“We respect the court’s decision,” said the bank in a statement. “We have successfully completed more HAMP modifications than any other servicer and will continue to improve delivery of this and other programs to support our customers in need of assistance.”
Of course, BofA had to complete more HAMP modifications than anyone else because it had the largest portfolio of toxic mortgages, thanks to its idiotic decision to buy Countrywide Financial. That’s like Comcast patting itself on the back for fielding the most customer complaints.