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By April 27, 2011 1 Comments Read More →

JP Morgan to Pay $56M to Settle Military Mortgage Violations

Lending giant JP Morgan Chase is paying $56 million to settle claims it repeatedly overcharged military families on their mortgages and improperly foreclosed on nearly a dozen service members.

The lending giant came under fire this winter after an NBC News investigation revealed it repeatedly violated the Servicemembers Civil Relief Act, a key safeguard that protects active duty military members from foreclosure, high interest rates and other civil and financial obligations.

After admitting and apologizing for the violations, JP Morgan Chase in February unveiled additional financial protections for military borrowers.

The company will also pay $27 million in cash to about 6,000 active-duty service members who were overcharged.

“We are sorry and regret the mistakes our firm made on mortgages for members of the military,” Chase official Frank Bisignano said in an emailed statement. “We hold ourselves accountable and responsible for these mistakes.”

The payments are subject to judicial approval as part of a class action lawsuit settlement.

Military borrowers have been able to capitalize on the additional protections since April 1. The company is lowering interest rates to 4 percent for eligible borrowers, a 2-percent drop from the cap mandated by the SCRA. The 4-percent ceiling will remain in place for a year after.


The new benefits will extend to veterans, too. Military members who served on active duty since Sept. 11, 2011, will be eligible for a mortgage modification, depending on their unique financial status.

Chase has also pledged to suspend foreclosures on deployed service members. Further, those who are somehow foreclosed upon improperly will have the sale rescinded and their mortgage debt erased.

In February, the company returned 10 homes to families that were properly foreclosed upon.

Service members with questions or concerns can contact Chase officials through a dedicated military hotline at 877-469-0110 or by visiting www.chasemilitary.com.

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About the author: Chris Birk writes about real estate and the mortgage industry for a host of sites and publications, from Lenderama and Bigger Pockets to the Huffington Post and Motley Fool. A former newspaper and magazine writer, he is also content director for a leading VA lender. Follow him on Google+.

 

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Posted in: Mortgages

1 Comment on "JP Morgan to Pay $56M to Settle Military Mortgage Violations"

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  1. Peter G. Miller says:

    There’s no doubt that JP Morgan screwed up, but this is one case where a major bank did not try to obscure what happened or deny responsibility. In some sense this is a step in the right direction.

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