Can you imagine serving and protecting your country overseas while a bank sets up website for military families devoted to the financial needs of military veterans, overcharges and forecloses on your home? This is what JP Morgan Chase did to military families. NBC news reports that JP Morgan Chase admitted that they overcharged some 4,000 military families on their mortgages and improperly foreclosed on homes of 14 military families.
Marine Capt. Jonathan Rowles,a backseat pilot of an F/A 18 Delta fighter jet for the Marines, is one of the victims that JP Chase overcharged. Mr. Rowles and his wife, Julia, said they’ve been battling the bank for quite some time. Mr. Rowles filed a lawsuit against JP Morgan Chase when the bank not only refused to lower his interest rate but also called him at all times of the day and saying that he owed as much as 10% and hounding him with debt collection calls for as much as $15,000 in arrears, according to NBC news.
Here's how it apparently happened:
Under a law known as the Servicemembers Civil Relief Act (SCRA), active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure according to NBC News. Now, the bank appears to have violated that law, which is designed to protect troops and their families from financial stress while they're in active duty. In a statement to NBC News, JP Morgan Chase chief communications officer Kristin Lemkau said:
"We are deeply appreciative of those who fight to protect our country and Chase funds a number of programs that provide benefits to military personnel and veterans, and while any customer mistake is regrettable, we feel particularly badly about the mistakes we made here."
Also, Ms. Lemkau said that beginning this week the bank will be mailing a total of about $2 million in refunds to families that may have been overcharged. She said most of the families improperly foreclosed on have gotten or will get their homes back. A bank official described what happened here as "grim," but emphasized the mistakes were inadvertent, not malicious.
Mr. Rowles' lawsuit is still pending. We are not sure if any of the military families that were overcharged and/or had their homes improperly foreclosed are going to file a lawsuit. Chase's blunder and dysfunctional financial institution can't sweep this issue under the rug. These are not just mistakes but a broken mortgage servicing business model. And I wonder if JP Morgan executives that testified to the House and Senate hearing last year will be charged with perjury with their statements of claims that foreclosure is the last option and they had fixed all their problems. Congresswoman Waters releases a statement today. "While their Nov. 18 testimony at a hearing of my Subcommittee on Housing and Community Opportunity claimed that the bank had fixed all problems in their servicing operations, the stories of these families clearly suggest otherwise. It is particularly disgraceful that these errors affected military families, some of whom are already dealing with the stress of deployments."
Rep. Waters calls mortgage servicing an industry in crisis and calls for servicing reform.
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