State AGs pressuring banks to fix loan modifications

The Wall Street Journal reports (New Pressure on Loan Modifying, 11/17/10) that state attorneys general are said to be putting pressure on lenders, including JP Morgan Chase, to fix the loan modification system, largely seen as not offering a sufficient number of loan modifications and performing too many foreclosures, as a condition of settling the lawsuits on the false foreclosure paperwork brought by the states.

Additionally Senators of both parties are urging banking regulators to increase scrutiny of foreclosure operations.

The lead attorney general in the probe, Iowa’s Tom Miller, claims that part of the issue with loan modifications “lies with servicers who see it as more profitable to foreclose on homeowners than to undertake modifications.”

This seems clearly to be the case with Chase, who practices parallel foreclosure and seems to put up every impediment possible to people seeking loan modifications.

Chase home lending chief fibs to Congress on a grand scale

Here are David Lowman’s comments before a Senate committee looking into the foreclosure problems:

Tuesday, November 16th, 2010, 1:47 pm

Foreclosure is always the last resort and least desired option for delinquent mortgages, and JPMorgan Chase uses all possible remedies prior to starting any foreclosure process, according to an executive in the bank’s home loan office. And in most cases, no one is even living in the property any longer.

Testifying before the Senate Committee on Banking, Housing and Urban Affairs Tuesday, David Lowman, chief executive for home lending, said the banking giant seeks to rectify all past-due mortgages but sometimes it isn’t feasible.

Just read a few of the foreclosure stories on this site and you will know his statement simply isn’t true, especially considering Chase has admitted it practices parallel foreclosure when someone applies for a loan modification.

How to keep Chase in court for 13 years

If someone wanted to write a novel with defaults, foreclosure, and lawsuits as the main story line, they would do well to start with this particular case.

It story starts with a loan made to a Chase predecessor in 1993.  The homeowner first defaulted in 1997 and managed to stay in the property until 2006; he kept the litigation going until now and at one point was awarded almost $100,000 in damages for wrongful foreclosure and what he could have earned renting the property out.

In the end, the borrower lost, but he sure made Chase work for its foreclosure.  Here is just a tidbit of the story to give you an idea.

The default prove-up hearing took place on April 18, 2007, after the trial court denied Chase’s oral motion to set aside the default. Plaintiff presented his evidence, and the trial court took the matter under submission. In the ruling, which the trial court issued on April 24, 2007, the trial court found on plaintiff’s first cause of action for declaratory relief that (1) Chase is bound by the judgment in the unlawful detainer action that the first foreclosure sale was conducted improperly, and (2) Chase breached the forbearance agreement by improperly declaring plaintiff in default on that agreement. On plaintiff’s second cause of action seeking to quiet title to the property, the trial court found it did not have the necessary parties before the court to grant that relief because Proper T View, not Chase, was the current owner of record. The trial court awarded plaintiff damages of $98,795.50 on the third cause of action for breach of contract, a sum that represents the rental value of the Rancho Mirage property minus the payments plaintiff owed to Chase on the mortgage for the 50 months between November 1999 and December 2003. On the fourth cause of action for slander of title, the trial court found in favor of plaintiff but also found the claim does not support an award of general damages. The trial court denied plaintiff recovery on his remaining causes of action. The trial court purported to enter judgment against Chase on August 31, 2007.

Chase’s foreclosure “experts”

Marketplace.org did a great piece on the want ads found by various lenders for foreclosure experts, presumably to staff up their operations in light of all the attention they have been getting and the impetus to actually have to review documents rather than just sign them.

But was was interesting about this piece was the comparison of the experience necessary for the positions being advertised.

Moon: So what types of qualifications does one need to be a specialist in foreclosures?

Wang: The types are varied, depending on who’s hiring. We looked at, for instance, GMAC — now Ally Financial — and that bank for instance was hiring a foreclosure specialist and wanted a college degree and three to four years of experience. But then Chase for instance was hiring a quality specialist, someone who would make sure that foreclosures were processed correctly and they were only asking for high school diplomas. So it really depended.

A high school diploma Chase?  Really?

Does someone with a high school diploma have even the most basic understanding of what a mortgage is, much less the experience necessary to review mortgage related paperwork for accuracy?

Here come the foreclosure fraud class action lawsuits

If your counting the number of class action lawsuits filed against Chase for fraud in filing false documents related to foreclosures, scratch a couple of marks into your bed post; two new class action lawsuits were filed this week.

Nov 10 2010. JP Morgan Chase bank’s foreclosure fraud process.

In a regulatory filing submitted yesterday, November 9, JPMorgan Chase & Co. acknowledged that two separate class action lawsuits have been filed against their company, alleging fraud related to its decision to temporarily stop foreclosure proceedings.

Two months ago, Chase had placed a moratorium on foreclosure proceedings, while it launched an internal investigation into the possibility of discrepancies in its foreclosure documents.

Last week, Chase announced it would start refilling foreclosure documents within a few weeks.

One of the class action lawsuits was filed in the US District Court for the Northern District of Illinois, charging Washington Mutual Bank and JPMorgan Chase & Co. with knowingly filing false documentation.

A separate suit against Chase Home Finance was filed in California state court as well.

JPMorgan also acknowledged a class action lawsuit filed on behalf of Charles Schwab and Cambridge Place Investment Management, a hedge fund company. That suit was related to mortgage backed securities sold to the investors with the demand that the bank buy back the securities due to their faulty foreclosure documents.

Bank of America and Citigroup had already disclosed that similar suits were filed against them as well.

In both class action lawsuits, they allege “common law fraud and misrepresentation, as well as violations of state consumer fraud statutes.”

No dates have been announced as to when the proceedings will begin.

While JPMorgan has fared better on Wall Street than most of its competitors, consumer confidence is definitely fading, as shares in the bank dropped 0.3% in early trading on Tuesday.

Chase parallel foreclosure victim wins house back

By Henni Espinosa, ABS-CBN North America Bureau . Redwood Shores, CA – 73-year Corazon Palma made history when she became the first person in California to win her house back from her lender even after her 4-bedroom house in San Jose, California was foreclosed.

Palma staged a battle against Washington Mutual through a wrongful foreclosure lawsuit – and she refused to back down.

Palma is a cancer-survivor who lives on a fixed income. So in 2008, she asked her lender to lower her monthly mortgage payments of $3,900 a month.

A year later, she said that her lender promised to send her a loan modification packet. Instead, a Coldwell Banker real estate broker came to her house to notify her that her house had been foreclosed at a Trustee Sale.

Palma said, “I was so shocked. It felt like a bucket of cold water fell on me. When they gave me the note, I called my attorney.”

She sought the help of Attorney Kenneth Graham, who represents many Filipino homeowners in Northern California.

Graham said, “WAMU deceived Mrs. Palma into thinking they were making loan modification efforts on her behalf while they were secretly planning a foreclosure sale on the property.”

Her fight in court paid off. Last January, a judge ruled that Palma be awarded back her house.

Last Friday, she attended a court hearing in San Jose to find out the terms of the judgment. Palma would have to wait until December 3 to know if she will end up getting her house back for free.

Graham said, “The best case scenario for Mrs. Palma is if a judge rules that the lender has no further right to exercise the loan against the property. Hence, Mrs. Palma gets the property for free.”

Worst case scenario for Palma – is that she continues to pay her mortage but at a lower monthly rate.

No matter the judgment, Palma said she’s glad she won the fight to keep her home.

She said, “But I know other homeowners are being abused as well and lenders really need to be taught a lesson for deceptive practices to stop.”

If you are an abused homeowner and feel that your house has been wrongfully foreclosed, you may contact the Law Offices of Kenneth Graham at (925) 932-0170 or visit their office at 1575 Treat Blvd. #105, Walnut Creek, California or their website, www.elaws.com.

Unsolicited Chase loan modification leads to foreclosure

This story is particular heinous on the part of Chase.  The homeowners were tooling along just fine in the home they owned for 17 years, having never missed a mortgage payment, when out of the blue Chase offered them an unsolicited loan modification and the chance to lower their payment.  Under the various stages of the process of working towards a permanent modification, the homeowners made all required payments.

Chase then dropped a bomb on them and told them they were behind $50,000 and needed to pay up or get foreclosed upon.  Unable to come up with the surprise balloon payment, Chase foreclosed upon them and they are now fighting eviction.

Chase’s behavior essentially amount to entrapment.

This is a new low for Chase.

Does Chase have ANY idea what it is doing with loan modifications?

This latest article from the Wall Street Journal has a prime example of Chase’s schizophrenic behavior when handling loan modifications:

After J.P. Morgan Chase & Co. agreed in January to her trial loan modification under the Home Affordable Modification Program, Stephanie Lulko made six $767-a-month mortgage payments, even though the bank said it had no record of her loan and then warned in a letter that she would be foreclosed on unless she paid $4,091.94.

The 44-year-old Ms. Lulko, of Oklahoma City, says bank employees told her to ignore the letter. Their tune changed in June, when J.P. Morgan said she earned too much to qualify for a permanent modification. The problem this time: The bank’s numbers were wrong. “I wish I had never applied for this modification,” she says.

In September, the bank rejected her request for a permanent loan modification for a second time. She faces foreclosure unless she pays nearly $5,000—the difference between her original and modified loan payments, plus late fees. Ms. Lulko has been unemployed since her temporary job at the U.S. Census Bureau ended in August.

J.P. Morgan denies any wrongdoing related to Ms. Lulko’s loan. “We worked with the borrower over a number of months and communicated the status of the loan modification during that time,” spokesman Tom Kelly says.

Did you get all that?

• Chase simultaneously claims to have no record of her loan but demand a large repayment at the same time.
• They tell her to ignore a letter they sent her.  Seriously?  What kind of respectable financial institution sends you a letter and then other people in the organization tell you to just ignore it?
• They claim she earns too much but have the numbers wrong.