California residents may have heard about a proposed class action suit involving Bank of America.
On Aug. 1, an attorney for the company appeared in federal district court to ask the judge to refuse the certification of the class action. The North Carolina-based company is being sued by several home owners for allegedly failing to comply with the Home Affordable Modification Program. Bank of America is the second-largest lender in the United States.
HAMP is a government program that is designed to help homeowners modify their loans. The plaintiffs in the case claim that Bank of America engaged in unfair practices, such as awarding bonuses to employees who caused their mortgages to be foreclosed. They claim that Bank of America awarded the modifications, but then fraudulently falsified documents and delayed the process. As a result, the loans were not modified, and the plaintiffs lost their homes to foreclosure. It was estimated that if the class is certified, approximately 300,000 people might qualify as plaintiffs.
If the class action is allowed, the plaintiffs will be in a better bargaining position in the case. However, an attorney for the bank claims that each case is different. He argued that the case is inappropriate for certification because the borrowers all have very different factual situations that requires individual attention.
A corporation is not permitted to represent itself in court. Therefore, when someone raises claims that a company engaged in unfair trade practices, an attorney may be able to help represent the company. It may be possible to obtain documentation that allows the attorney to evaluate the case, negotiate a settlement or prepare a defense in order to take the case to trial.
Source: Bloomberg News, "BofA Argues Against Class-Action Loan Modification Suit", Janelle Lawrence & David McLaughlin, August 01, 2013