JP Morgan Chase Settles With Military Families
April 25th, 2011
Military families that were overcharged on their mortgages or even went through improper foreclosures have reached a settlement with JP Morgan Chase & Company[1]. The lender will pay $56 million to settle the claims, an additional $12 million to the class action lawsuit itself and set aside $15 million for additional damages found in later cases not actually part of the lawsuit. JP Morgan Chase is accused of violating the Service members Civil Relief Act (SCRA), which prohibits lenders from charging active duty military members more than 6 percent on their mortgages and from foreclosing on their homes during service and for nine months after the completion of their active duty[2]. The suit was initiated by a marine captain who charged JP Morgan Chase with refusing to lower his interest rate when he went on active duty and eventually threatening to foreclose.
Ultimately, JP Morgan Chase admitted wrongfully foreclosing on 18 service members and said it had found “other potential cases” in the interim. Frank Bisignano, Chase Chief Administrative Officer, issued a statement at the end of last week saying that “we hold ourselves accountable and responsible for these mistakes and fixing them is just the beginning of a new way forward.” The lender has lowered its interest rate to 4 percent for military members on active duty for up to a year after completion and has expanded its loan modification program for service members who have served since September 11, 2011. The lender also pledges to forgive all mortgage debts for the service members who were foreclosed on.
Despite all these changes, at least one retired colonel remains skeptical that JP Morgan Chase will institute long-term changes to reflect the terms of the settlement. “They realized that the tsunami was headed right for them,” he has said, stating that “to this day the mortgage servicing industry [does not] understand the SCRA and all of the protections.”
Do you think that JP Morgan Chase has “settled up” in this case? How should they have acted differently and do you think that the changes will stick?
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[1] http://nationalmortgageprofessional.com/news24790/military-families-reach-48-million-plus-settlement-jp-morgan-chase-faulty-foreclosures Plus+Settlement+With+JP+Morgan+Chase+for+Faulty+Foreclosures
[2] http://www.pressherald.com/news/nationworld/chase-settles-military-mortgage-lawsuit_2011-04-24.html
April 25th, 2011 at 8:29 AM
It is about time a mortgage company did something for the men and women who put their lives on the line to protect us all. Now if only other companies AND the government would do the same and make serving in our military worth more than just the pride and satisfaction of knowing they are serving their fellow Americans.