District Court grants final approval of $12 million class action settlement

Courts Class Action Settlement Mortgages Consumer Finance

On January 25, the U.S. District Court for the Southern District of Ohio granted final approval to a $12 million class action settlement resolving allegations that a calculation error in a national bank’s (defendant’s) software wrongly assessed the plaintiffs’ eligibility for loan modifications. The settlement class, which includes the defendant’s customers who, between 2010 and 2018, allegedly qualified for a home loan modification or repayment plan as required by government-sponsored enterprises or other federal agency requirements, but did not receive an offer for those services from the defendant. The plaintiff class accused the defendant of failing to “adequately test, audit, and verify that its software was correctly calculating whether customers met threshold requirements for a mortgage modification.” Additionally, the plaintiff alleged the bank discovered the issues in 2013, but did not make the issue public until 2018. According to the plaintiffs’ unopposed motion for preliminary approval, the deal will provide $9.1 million to class members with each class member receiving between $1,000 to $19,000, and 22.7 percent of the total settlement sum going towards attorney costs and fees.