UPDATE 1-BofA defeats class certification in HAMP mortgage case
Sept 5 (Reuters) - A lawsuit accusing Bank of America Corp of reneging on promises to help distressed homeowners modify their mortgage loans and of driving them into foreclosure instead cannot proceed as a class action, a federal judge has ruled.
While agreeing that the borrowers' claims "may well be meritorious," U.S. District Judge Rya Zobel in Boston said there were too many different issues to address them as a group.
Zobel ruled on Wednesday in a nationwide lawsuit accusing the second-largest U.S. bank of failing to comply with the Home Affordable Modification Program, or HAMP.
The government created HAMP in 2009 to encourage banks to help struggling borrowers keep their homes.
"This case demonstrates the vast frustration that many Americans have felt over the mismanagement of the HAMP modification process," Zobel wrote. "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."
Still, Zobel said class certification was improper because the claims "rest on so many individual factual questions that they cannot sensibly be adjudicated on a classwide basis."
The plaintiffs included 43 individuals and couples from 26 U.S. states who claimed that Bank of America failed to help them obtain loan modifications to which they were entitled. They had sought to certify 26 classes, one per state.
"We think the court got it wrong," said Steve Berman, a lawyer for the plaintiffs, in an email. He said the plaintiffs plan to appeal.
Bank of America representatives did not immediately respond to requests for comment.
Mortgage problems have dogged Bank of America since its 2008 purchase of Countrywide Financial Corp, once the largest U.S. home loan provider. The purchase cost just $2.5 billion, but has since cost Bank of America tens of billions of dollars for litigation, loan buybacks and other mortgage expenses.
The case is In re: Bank of America Home Affordable Modification Program (HAMP) Contract Litigation, U.S. District Court, District of Massachusetts, No. 10-md-02193.