The complaint was filed against several prominent banks by consumers who are members of a class action lawsuit that involves widespread abuses. The complaint, which can be filed in either state or federal court, claims that the defendants deliberately set out to inflict economic damage on the plaintiffs. These plaintiffs include current and former homeowners, as well as persons who purchased a home at a foreclosure auction. The complaint further claims that Regions Bank specifically targeted low and moderate income groups in an effort to keep these groups from challenging predatory lending practices. The complaint further claims that Regions intentionally violated the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Billing Act (FCRA). The defendants deny all allegations of wrongdoing and maintain their right to litigate the case in state court.
Regions Bank Class Action Lawsuit
The complaint alleges that Regions Bank forced borrowers who own a residential property, home equity loans or line of credit to retain a certain minimum level of coverage as a condition of refinancing their mortgage. According to the complaint, Regions intentionally set out to violate the minimum required level of required insurance coverage so that it would receive a higher profit on the sale of the residential property. The complaint further claims that the defendants deliberately set out to inflict economic damage on the plaintiffs by subjecting them to unreasonable terms and conditions. Specifically, the complaint alleges that defendants failed to make any reasonable accommodation for the plaintiffs in providing a home equity loan that would result in a defaulted mortgage. This resulted in the plaintiffs being forced to engage in a 30-day default and the forced auctioning of their property at a ridiculously high price.
Other class members who signed an agreement to purchase a home at a specific auction also suffered economic hardships as a result of the sale.
One class member bought her home at the auction at a price that was $700 below market value. She was forced to sell it at a reduced price because her lender would not allow her to refinance her loan. This leaves her with a substantially negative equity in her home, which she will be required to either pay off or lose her possession of her home. Another class member who signed an agreement to purchase a residence through an auction is facing similar circumstances.
Regions Bank’s failure to provide an adequate amount of housing inventory has caused the forced-settlement cases filed against the bank to fail. Plaintiffs have been unable to prove that they were harmed through lack of inventory, despite having signed contracts that required the banks to supply them with a sufficient number of homes to list in their Multiple Listing Service database. In one case, a judge stated that the plaintiff could not show that she had been injured through lack of inventory.
Plaintiffs argue that this was meant to exclude Class Members who purchased foreclosed properties at pre-foreclosure prices. However, the courts have determined that the number of properties on the Multiple Listing Service database, as well as the reasonable market price for each property must be shown to avoid a possibility of a speculative default.
The final class in the lawsuit, a Settlement Class, consists of current and former homeowners who were forced into forced-settlements with their lenders.
The plaintiffs’ attorney has argued that the defendants’ attorneys did not properly instruct their clients on the consequences of settling their loans outside of court, and that these customers were never provided with adequate information about how a forced-settlement would affect their ability to re-establish their mortgages and obtain new home loans. In addition, the defendants have failed to show any benefit to their client’s injuries that would prevent them from settling with the lender. Because the lawsuit was brought by a lender, the defendants have also been ordered to prevent their employees from discussing aspects of the lawsuit with anyone other than themselves, so as to prevent any attempt to defraud the plaintiffs.
As you can see, there are many classifications of the Regions Bank Class Action Lawsuit.
Some of the most noteworthy include: forced-settlement, foreclosures, insurance claims, and home rentals. If you feel you fit any one of those categories, contact a lawyer immediately to discuss your case. It is best to get a lawyer as soon as possible, before your credit rating is damaged. And in California, if you are a plaintiff, you may qualify for additional compensation.