It can be presumed that the argument in favor of a class action suit is based solely upon the concept of “power in numbers”.
Good concept. Now let’s take a closer look at the numbers.
Banks pray for class action suits. Don’t think for a moment that they haven’t prepared for a few lawsuits, they have. J.P. Morgan Chase recently announced it has paid out over $9 Billion in legal costs. That’s 9 Billion dollars with a “B”.
In a class action suit the class generally settles for pennies on the dollar while the lawyers walk away with the bulk of the settlement. Class action suits against predatory lenders are actually protective suits for these predators. If the bank looses, they would far sooner pay $500,000 to be split between a class of, let’s say, 500 rather than $250,000 or possibly more to each of the 500 members of the, would be, class had they each sued separately, and in some cases be forced to quiet the title to the homeowner as well. Think about it, who wouldn’t pray for class action?
The class action suit only deals with 1, or 2 issue/s (cause/s of action) common to the class. There are generally 15 or more violations of federal and state statutes found in any given mortgage, each of which carry their own penalty, and offer their own value in a settlement, but not all of them are common to the class.
In some class action suits provisions can be made to adjudicate other causes of action not common to the class. However, filing separate cases forces the lender to secure legal council for each and every case brought before the court rather than for paying once for council on the class action. If the bank looses they have to pay not only their attorneys, but yours as well. Factor that into the long term cost to this predatory lender.
Acceptance of this low ball settlement rendered from a class action suit often voids a homeowner’s right to sue by signing waivers agreeing that they will not sue the bank in the future for any reason, without regard to any amount of their wrongdoing.
I heard of one class action settlement in where each member of the class received only $400 for all their trouble when they would have been entitled to $400.000.00 had they not joined the class.
Remember you can’t modify a fraud. The US Supreme Court, state courts, and courts around the world have all upheld the common law maxim: Fraud voids everything. One case in point: United States v. Throckmorton, 98 US 61, 70 (1878) “Fraud vitiates the most solemn contracts, documents and even judgments”. From the Latin principal, fraus omnia vitiate ab initio.
Ultimately it is your decision to make whether to join a class action or not. Myself, I would much rather deal as hard a blow to an industry hell bent on the destruction of middle class America.