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.