Earlier this month, Bank of America, N.A., convinced a California court to reject certification of a proposed class of homeowners who experienced long delays when modifying their mortgages under a federal housing program. The plaintiffs’ novel theory, while inappropriate on a class basis, still might result in lenders being liable to individual consumers.

Antonio and Beatriz Esquivel have a residential mortgage with BOA, and they applied under the Federal Housing Administration’s Home Affordable Modification Program (HAMP) to lower their monthly payments. According to the couple, BOA accepted their application but then breached the new loan terms by continuing to collect earlier missed payments and by reporting prior delinquencies to credit agencies. Claiming that those practices are rampant at BOA, the Esquivels sought certification of a class of similarly situated borrowers.

The delay at issue was that between the recording of a government lien on the Esquivels’ property —one of the last steps in the HAMP process—and implementation of their modified loan terms. BOA admitted that, for 20% of its HAMP applications, that delay was more than one month. Despite that, the court ruled that determining purported violations of modified loan terms would require transaction-by-transaction analyses that would outweigh the benefits of a classwide trial. The court therefore denied class certification.

Although unsuccessful in their bid to lead a class action, the Esquivels raise an interesting question: can a borrower recover damages for her bank’s failure to timely implement modified loan terms? The Esquivels say that that conduct violates not only simple contract principles but also several California laws, namely the Consumer Reporting Agencies Act, the Rosenthal Fair Debt Collection Practices Act, and the Unfair Competition Law. The viability of those claims on an individual basis has yet to be resolved. In any event, lenders should be aware that ambitious class-action lawyers are out there trying to make money from those circumstances.