Real Estate Journal Online

In an effort to make up for mistakes on military foreclosures, JP Morgan Chase announced yesterday that it is going to “significantly enhance its programs to help military and veteran customers”[1]. In a statement from Jamie Dimon, the company’s chairman and chief executive, the lender expressed regret for “the mistakes we made on military foreclosures,” calling the incidents a “painful aberration on [our] track record [of honoring military and veterans].” The lender admitted before a congressional committee last week that they foreclosed on homes of active-duty personnel who should have been exempt from foreclosure under the Service Members Civil Relief Act (SCRA)[2]. The bank also charged some armed forces personnel interest rates of more than 6 percent, which is in violation of the act also. The violations affected some 4,500 service members, 18 of which lost their homes. $2 million has been dedicated to paying back over-charged military members, and Chase is rescinding sales of foreclosed homes not already sold and forgiving the remaining mortgage debt on those homes.

As part of its initiative to demonstrate commitment to the U.S. military, Chase has also announced new programs to “begin a new way forward with the military and veteran community.” Programs include initiatives to keep rates for military members on active duty low and a special military modification program that will exceed HAMP requirements and could lower rates on second mortgages as low as one percent. Furthermore, Chase will no longer foreclose on “any currently deployed active military personnel.” Lenders are only required by SCRA to forebear from foreclosure if military borrowers took out loans prior to going on active duty. As part of its new military outreach program, JPMorgan Chase will also donate 1,000 homes to military members and veterans over the next five years, host 10 borrower outreach events near large military bases and open five new Chase Homeownership Centers near large military bases.

Officially, Chase blamed internal breakdowns for the problematic foreclosures, but former employees of foreclosure law firms have testified that military checks are sometimes falsified in order to take advantage of active-duty loan perks and privileges. During hearings on the subject, industry leaders suggested that Chase’s problems were not unique to that lender, but likely industry-wide and one employee of a Florida foreclosure law firm claimed to have been fired after refusing to fake military checks.

Our military deserves our support every step of the way and Chase clearly violated existing laws and regulations governing how military families and their mortgages are handled. Do you think that these new programs make up for the transgressions?

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[1] http://nationalmortgageprofessional.com/news23648/jpmorgan-chase-announces-new-programs-military-and-veterans

[2] http://www.palmbeachpost.com/money/foreclosures/jpmorgan-chase-vows-to-fix-mistakes-on-military-1257148.html