TAMPA — Tampa's beleaguered LM Funding America has staved off one legal threat even as it still faces another.
A federal judge in Tampa last week denied a request to certify a class action lawsuit against LM Funding, which buys the rights filed to collect unpaid homeowner associations fees. The ruling by Judge Charlene Edwards Honeywell came in a suit alleging that LM Funding and a related company, Business Law Group, tried to collect more fees than they were owed.
Although the case will continue, the plaintiff's failure to win class-action certification "is a huge win'' said R. Dean Akers, LM Funding's chief operating officer.
For Previous Coverage or related coverage:
LM Funding pays the association an amount equal to an owner's delinquent dues, then tries to collect directly from the owner or first-mortgage holder if the owner defaults on the loan. State law limits the amount that can be collected from first-mortgage holders to 12 months or 1 percent of the mortgage, whichever is smaller.
Wilmington Savings Fund Society, which acquired the distressed loans of some LM Funding clients, sued after the company allegedly tried to collect in excess of what state law allows. Wilmington argued that the suit should be certified as a class action including other mortgage holders, but the judge ruled that the issues were better handled on an individual basis.
LM Funding is still battling a South Florida class-action suit accusing it of deceptive trade practices and charging illegally high interest rates. Since going public in 2015, the company has cut staff, slashed salaries and seen its stock plunge from $10 a share to $4.25 as of this afternoon.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate