In October 2010, JP Morgan Chase announced that the company would be temporarily suspending certain foreclosure processes following the discovery that court documents were not being properly reviewed by third party personnel. JP Morgan Chase had allocated some of its foreclosure verification processes to third party foreclosure companies. However, JP Morgan determined that the personnel at the third party companies were not reviewing or properly notarizing foreclosure affidavits before signing off on them.
Consequently, two lawsuits have been filed against JP Morgan Chase regarding their methods for managing foreclosures. The lawsuits were specifically filed against Washington Mutual Bank and JPMorgan Chase & Co in the United States District Court for the Northern District of Illinois, and against Chase Home Finance in California state court.
The allegations in the lawsuit are common law fraud and misrepresentation, as well as violations of state consumer fraud statutes. It is not known who filed the lawsuits at this time. JP Morgan also indicated that the company is being sued for mortgage backed securities by other companies, such as Charles Schwab and Cambridge Place Investment Management. For this reason, class action status seems appropriate to some.
The U.S. mortgage crisis does not cease to exist. And JP Morgan is not the only bank that has been adversely affected by faulty foreclose processes. Currently, several other banks have lawsuits filed against them, including:
- Bank of America lawsuit involving investors who purchased over $375 million in mortgage backed securities
- Citigroup, Inc. lawsuit, in part, for inappropriate underwriting of residential mortgage backed securities.
- Wells Fargo & Co. has several class action lawsuits filed against them.
Delayed foreclosure processing may open the door for consumers to sue banks on a large scale, potentially leading to another class action lawsuit for banks across the U.S.
Burton Padove, Indiana and Illinois lawyer, is available to help those who are injured because of defective products. He can be reached at (877) 446 5294.