Citibank TPP Loan Modification Cases Better Resolved Individually than in a Class Action, Says Appel
A federal Circuit Court of Appeals has denied a request to consolidate homeowners’ claims against Citibank into a single class action related to breach of their trial loan modification agreements, called trial period plans (TPPs).
TPPs are offered as the first step to getting a loan modification under the federal Home Affordable Modification Program, called HAMP. The HAMP program started in 2009 as a result of the economic meltdown and the collapse of the housing market. The goal of HAMP is to provide loan modifications to eligible borrowers to help them avoid foreclosure.
TPP loan modification, homeowners typically submit an application and supporting financial documentation. The TPP modification typically lasts for three months, after which time the homeowner must be provided with a permanent loan modification.
Homeowners filed lawsuit against Citibank seeking to combine their claims into a single class action. A class action is often an efficient way of resolving numerous consumer claims.
Under court rules, however, the claims must have “commonality,” which means that they must come from common factual issues. In this case, however, the court ruled that the facts involved in the loan modifications – changes in income, Treasury directives, required documentation – were so individualized that the cases were better resolved in individual cases rather than in a class action. That is, there was not enough commonality between the claims. The homeowners now may be permitted to pursue their claims individually.
Despite some improvements, loan modifications under HAMP continue to be a problem. Banks continue to foreclose on homeowners who would be better off staying in their homes. Studies have shown that both banks and homeowners do better if they are provided reasonable loan modifications.
The case is available here: Bernard v. Citimortgage
Culik Law has sued most major banks for breaching TPP loan modification agreements. If you’ve had problems getting a loan modification, give us a call for a no-cost case evaluation to see if we can help you.