A federal judge tentatively approved Citibank’s agreement to settle class action claims that over its home equity lending practices for homeowners whose ability to use lines of credit was cut or suspended during the mortgage crisis.
The deal gives up to a cash award of $120 to holders of a Home Equity Line of Credit (HELOC) between Jan. 1, 2008 and Jan. 1, 2012 who incurred fees for early closure as a result of suspensions. It would also allow borrowers’ to have HELOCs reinstated in some cases.
Edelson McGuire, law firm for the borrowers, will receive fees and expenses up to $1.2 million and the class representatives will share $36,000.
Citibank originally announced the terms of the settlement on August 31, but Monday’s order is the first by U.S. District Judge Maxine Chesney tentatively approving the deal.
A final decision will come after a March 15, 2013 hearing before Chesney in San Francisco.
The terms do not include an overall estimate of the total value of the settlement.
The bank did not admit any wrongdoing in signing on to the nationwide settlement.
The suit accused the bank of suspending or cutting home equity lines of credit because of alleged drops in home values after the mortgage meltdown, in what the suit asserted was a thinly-veiled attempt to limit the bank’s financial exposure to the collapse of the housing market.
Case: In re Citibank HELOC Reduction Litigation, No. 09-cv-350MMC