JP Morgan Chase Violates SCRA but Pays Veterans Back

J P Morgan bank sign

by Levi Newman on February 3, 2011

JPMorgan is paying $2 million to 4,000 service members after becoming aware of overcharges and errors made in their mortgages.  Among those affected by JPMorgan’s errors were 14 service members who were forced into foreclosure.

“We made mistakes, we deeply regret them, and we are working to fix it in the hopes that this does not happen again,” stated JPMorgan Chase spokeswoman, Kristin Lemkau.

In addition to the $2 million in payment, Chase has resolved 13 of the 14 foreclosure cases, and is continuing to work on the last one.  Each of the service members forced into foreclosure had requested their rights under the Servicemember’s Civil Relief Act before they entered into active duty.  The errors to their loans were only realized after a Marine Capt. Jonathon Rowles filed a lawsuit in federal court.

The Servicemember’s Civil Relief Act was designed to protect certain financial investments of active duty service members.  One of the protections requires banks to offer reduced interest rates of 6 percent for loans a service member acquired before active duty or mobilization.

Rowles acquired a mortgage of $255,000 in 2004, two years before he began his active duty service. His mortgage was then sold to Chase later that year. Rowles claims that Chase violated SCRA by not reducing his interest rate on the date his status as active duty became effective, continuously requiring him to re-apply for SCRA protections, and for attempting to collect improper account balances.

His suit suggests that “Chase repeatedly violated the SCRA by engaging in aggressive collection methods that included threats to report Rowles to the credit bureaus and to foreclose.”

“Chase officials were aware of some of the problems with service members before the lawsuit,” stated Lemkau, “but the full-on review intensified afterward. Chase’s mistakes occurred over the last five years and were not limited to one particular area of the country.” She was unable to give the number of military members who had been affected by the SCRA violations.

The recent lawsuit has also brought into light the large number of military members who are unaware of their SCRA rights

Chase’s SCRA violations have also prompted two senators to demand a federal investigation.

“Soldiers are fighting on the frontlines to protect our country shouldn’t have to needlessly fight with banks to protect their homes,” stated Sen. Jack Reed.  “JPMorgan Chase was violating the law, and I am concerned other banks may also be wrongly overcharging our troops or taking

Photo thanks to Steve Rhodes under creative common license on Flickr.

{ 5 comments… read them below or add one }

Daniel Sinclair February 21, 2011 at 9:06 pm

Huh, I was in the military from ’98 to ’06, and acquired a home loan from Chase in ’05. I just started having trouble in Dec. paying (due to loss income). I get up to 10 calls a day (never a message), I have answered, but quickly found it goes no where. Applied for a home mod. in dec. They still have not opened the file (apparently VA Loans have insurance so…). I told them I would send a check, but they told me it would probably get reversed back b/c it would not be the full balance owed ( that was today). Basically they have done nothing to help (it honestly seems like they just want me in foreclosure status), and did ask me to answer 1 question…”am I active military or veteran” once I said “veteran” it was blow me off as usual. Glad somebody’s do something to put them in check!

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Jason K March 3, 2011 at 4:55 am

I deployed 1 Feb 2010 and will be until April 2011 here in Iraq. To make a long story short my (taxes) escrow went up and I was unaware while I was gone. My payments fell behind no more than 30 days at time for a few months, all of which went on my credit report and hurt my score. I thank God I am not in a foreclosure situation like all the horror stories I have read on the net. My story is that I am merely trying to get my credit score and potentially harmful information on my report removed. As soon as I found out about the negative financial situation I was in (January 2011), I called Chase over and over and over to try to get it repaired with the SCRA dept. I must have spoken to 12 different people all assuring me my account would be sorted and repaired (as I did repay everything that was owed for the lost escrow to get back to a zero monthly balance). I sent them my deployment orders as they requested and made numerous follow up calls only to get more excuses and passed on to another person. I finally got through to the right person. Well that is what I thought anyway. She (Jennifer) reassured me this would be easy to fix and would only take a few days. I waited a week and called Chase Bank (via Skype as that is my only way to make calls). I spoke to person number 13 who then transferred me to a gentleman named Michael who is an account supervisor. He explained that I do not qualify for SCRA since I was on active duty before I bought the house, being deployed, and all of this mess happening while I am deployed, still does not qualify for me to get my credit report repaired. He said he would look into it further and see what he can do then contact me via email. I never received an email from him nor anyone else. Something just does not add up here. Maybe I am reading SCRA Title I sections 104 and 108 & Title V section 501 incorrectly.
I would love to make this public knowledge as I don’t have the resources not to mention I am in Iraq to take on such a cause. Chase is by far the worst mortgage lender I have ever dealt with. Am I angry? You bet. I would definitely suggest Service-members take their business elsewhere. I love serving our country but it boils my blood to think I am sacrificing so much to help sustain the way of life for such a company.

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Audrey Beebe March 3, 2011 at 7:05 pm

Jason,

Your situation is understandably frustrating. Unfortunately the 13th person you talked to was right. The SCRA protects the debt you incurred before active duty service. If you acquired your loan after entering active duty, it does not fall under SCRA eligibility.

We wish you luck and safety in your deployment.

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Kari W March 28, 2012 at 10:46 am

I applied for scra protection while in the process of getting harp assistance. Chase is now making me reapply for scra and telling me the protection may not be granted because this harp assistance is “new loan”. I am going from an interest only adjustable rate to a fixed. I am trying to keep my house. Things don’t change with Chase I guess.

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jay grant June 15, 2012 at 8:47 pm

kari i know a non profit organization who helped me eliminat my negative equity gave me a principle reduction of 112k have u heard of hafa give them a call 619516 8113 Economic Stabilization Project

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