Cross-posted at The Levee. Putting a finger in the dyke since 1970.
From the Courthouse News Service:
JPMorgan Chase instructed homeowners to stop making mortgage payments, as that was the only way to be considered for a loan modification, then repossessed their house when they followed the bank's advice, a couple claims in Federal Court.
Faiz and Khadua Jahani have sued JPMorgan Chase in Federal Court, claiming that the bank told them the only way they could qualify for loan modification is to intentionally become delinquent on their mortgage - i.e., to miss multiple payments.
In their federal complaint, the Jahanis say they contacted the bank in December 2008 "to indicate that they were having trouble paying their mortgage and would like to discuss a possible loan modification."
The Jahanis say the bank representative told them "that they would not work with plaintiffs at all because they were currently not in breach of their loan terms."
In other words, the bank couldn't help them adjust their mortgage because they had been too good about making their payments. They needed to be a little less trustworthy:
Plaintiffs were specifically advised at that time to stop making payments for a period of three months, at which time [JPMorgan Chase] would consider a loan modification. Plaintiffs were specifically informed that as long as they were current on their mortgage payments, that defendants would not consider a loan modification.
Being good customers, the Jahanis did as they were told.
Whoops.
"Reasonably relying on the direction of [JPMorgan Chase], plaintiffs stopped making their loan payments. Plaintiffs are informed and believe and thereon allege that [JPMorgan Chase] immediately reported to the various credit reporting agencies (Equifax, Experian and TransUnion) that plaintiffs were late on their mortgage payments.
"On or about June 23, 2009, [JPMorgan Chase] sent a letter to plaintiff entitled 'Notice of
Intent to Foreclose,' indicating that plaintiffs were past due in their mortgage in the amount of $100.65 and that plaintiffs need to bring the account current within 30 days to avoid foreclosure proceedings. No Notice of Default accompanied the letter, nor was any Notice of Default ever served on plaintiffs."
Months of correspondence between the Jahanis and Chase followed, with the Jahanis repeatedly sending Chase documents it had requested, and Chase repeatedly sending them letters claiming it had not received proper documentation and that their loan modification was "in jeopardy."
The Jahanis say they called the bank to check on the status of their loan modification, and were told to disregard Chase's letters, that the bank "had in fact received all necessary documentation."
Then in October 2009, [JPMorgan Chase] sold their house at a trustee sale. The Jahanis say strangers came to their house and told them that "the property had sold at auction, that plaintiffs no longer owned the property and that they (meaning the unnamed persons) were interested in buying the house from the bank."
This is what it's come to.
After a decade of trashing homeowners and the wider economy with reckless subprime speculation, the too-big-to-fails are still at it. How can one reasonably expect to be a reputable credit consumer when the deck is stacked against you in this way? When an attempt to do the right thing is met with overwhelming punitive action?
Financial reform is worth the fight.
Don't back down.