Apparently still up to no good, Chase is accused again of bad deeds
JPMorgan Chase Accused Of Fabricating Paperwork, Imposing Extra Costs On Borrowers
In a case that suggests the financial crisis far from marked the end of big bank misconduct, JPMorgan Chase is facing a potential class action lawsuit over claims that it manipulated thousands of mortgage documents in order to gain a financial advantage in bankruptcy cases.
The lawsuit, led by plaintiff Ernest Michael Bakenie, has yet to be recognized as an official class action filing in the California district court where it’s taking place, according to the blog Naked Capitalism. Still, the accusation is a major one: It alleges JPMorgan Chase increased profits by methodically fabricating paperwork in part to impose extra costs on borrowers over the course of thousands of bankruptcy cases dating back to 2009.
The charges are particularly serious given the national outcry over mortgage fraud and robo-signing in recent years, and a general atmosphere of increased scrutiny on mortgage activity since the housing crisis, which critics allege was caused in part by unethical mortgage practices on the part of big banks and lenders.
News of the case arrives amid what is already shaping up to be another season of setbacks for JPMorgan, with the bank’s profits falling by nearly a quarter in the past three months. In addition, the bank has halted its efforts to collect on consumer debts in multiple cities across the country.
The suit also comes just a few months after JPMorgan agreed to pay $153 million to settle another fraud case with the U.S. Securities and Exchange Commission, this one based on accusations that JPMorgan was negligent in providing important details to investors about a mortgage transaction — claims that JPMorgan neither admitted nor denied.
It’s not yet clear whether something similar will happen with the California case, although the SEC settlement, reached in June 2011, wasn’t the first nor the last time that JPMorgan agreed to pay out a major sum in order to bring legal charges to a speedy conclusion.
JPMorgan isn’t the first big bank to be hit with a suit alleging mortgage misconduct in recent months. Firms including Bank of America, Allied Home Mortgage, Wells Fargo, Citigroup and Morgan Stanley are either fielding legal accusations related to mortgage misconduct or in the process of reaching major settlements on the topic.
Bad bad Chase | admin January 19, 2012
By Ron Shevuah, February 24, 2012 @ 2:09 pm
I’ve gotten whacked a number of times by Chase in the past year by overdraft fees for small purchases, as many as 3 in one day. Is there some chance I could get some compensation? I read recently that Chase had a 110 million dollar judgement against it for just this sort of thing.
BTW, I’m now with Boeing Employees Credit Union.
Feel free to contact me directly at urnammu@hotmail.com
By Bank customer, February 27, 2012 @ 4:52 am
You do realize that writing post dated checks is not exactly legal. Once a check leaves your possession, it becomes LEGAL TENDER. So if the person you gave it to can’t read that’s not the banks fault. By the way, had you taken the time to read your account disclosure, you would have seen what Chase says about the processing of these checks- checks period!
All banks have similar procedures regarding post dated checks. The moral of this story? Hold the check until the money is there!
By admin, February 27, 2012 @ 7:25 am
I’ve seen nothing to indicate that writing a post-dated check is actually illegal as you suggest. If you are so certain that the Chase account disclosure specifically addresses post-dated checks, why haven’t you posted an excerpt?
The point here is that Chase in all likelihood went from honoring post-dated checks to cashing them as a matter of course because it increases their overdraft revenue.