A federal judge refused to dismiss a case filed against Bank of America (BAC) by homeowners who claim the banking giant wrongfully denied them a chance to modify distressed loans under the government’s Home Affordable Loan Modification Program, or HAMP. HAMP was created by the federal government to provide billions of dollars of support to the housing market by encouraging lenders to modify loans to stave off foreclosures. The case – In Re Bank of America Home Affordable Modification Program Contract Litigation – was green-lighted to go forward by Massachusetts U.S. District Judge Rya Zobel after she denied BofA’s motion for dismissal on several grounds including the judge’s determination that “the motion to dismiss the state consumer protection claims fails on the merits or is premature.” The litigation is the result of 26 separate cases filed by homeowners in 19 states. Those claims were consolidated and transferred to the Massachusetts federal court by the Judicial Panel on Multidistrict Litigation. Bank of America responded to the lawsuit saying, “The bank is pleased that the court dismissed four of the eight counts in the consolidated complaint, including the nationwide claims.” In the judge’s ruling, she found the plaintiffs “lacked standing to bring both their breach of contract and promissory estoppel claims.” The court added, “Plaintiffs’ claims for breach of the duty of good faith and fair dealing fail because they have not stated a claim for breach of contract. The covenant of good faith and fair dealing is implied in every contract.” Write to Kerri Panchuk.