Maine Class Action Accusing Bank Of Manufacturing Foreclosure Documents Gets The Boot; Judge Says Each Homeowner Must Pursue Claims Individually

In Portland, Maine, Bloomberg reports:

• Ally Financial Inc.’s GMAC mortgage unit won’t have to face much of a lawsuit by Maine homeowners seeking damages over what they said were the company’s wrongful foreclosure practices.

• U.S. District Judge D. Brock Hornby in Portland, Maine, granted GMAC’s request to dismiss two claims in the complaint, according to a decision yesterday. He will probably throw out the remaining claim, Thomas Cox, a lawyer for the homeowners, said in an interview.

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• If false documents are used in foreclosure cases, homeowners can seek to vacate the judgment in their particular cases, Hornby wrote. They can’t file new lawsuits, according to the decision. “A contrary ruling would mean that the outcome of every lawsuit could produce a later lawsuit by the unhappy loser, seeking damages on account of the outcome of the former lawsuit and claiming that it resulted from false testimony or false affidavits,” Hornby wrote.

• Cox called that a “hollow remedy” because most homeowners can’t afford defense attorneys. [...] The Maine homeowners, who filed the lawsuit last year seeking class-action status, accused GMAC of filing false documents in foreclosure cases. They said a GMAC employee signed sworn affidavits without verifying the accuracy of the information. The homeowners sought damages and in December unsuccessfully tried to stop GMAC foreclosure sales in Maine.

For the story, see GMAC Won’t Face Much of Maine False Foreclosure Documents Suit.