JPMorgan Chase Advised Homeowners to Stop Making Loan Payments…and Then Foreclosed

[The Straight Story]

JPMorgan Chase Advised Homeowners to Stop Making Loan Payments…and Then Foreclosed
Tuesday, April 06, 2010

JPMorgan Chase has been accused of telling homeowners to not pay their mortgages in order to be considered eligible for a loan modification—only to then foreclose on the properties for non-payment. The matter was brought to light by a lawsuit filed in Sacramento, where Faiz and Khadua Jahani have accused Washington Mutual and its new owner, JPMorgan, of providing contradictory information and endangering the couples’ ownership of their home.

“I’ve seen this happen to so many people,” the Jahanis’ attorney, Piotr Reysner, told Courthouse News Service. “When they come in here to tell me their story, I can actually tell it to them.”

Reysner said his clients were told by a bank representative that they had to be in breach of their loan terms before they could qualify for a loan restructuring. The Jahanis were allegedly informed to stop making payments for three months. But once they did this, they received threatening letters from the bank instructing them to pay the outstanding amount or else face foreclosure.

http://www.allgov.com/Controversies/ViewNews/JPMorgan_Chase_Advised_Homeowners_to_Stop_Making_Loan_Payments__and_Then_Foreclosed_100406

[Froward69]

1. Why am I not suprised...

after all once the loan defaults the bank then collects upon the Mortgage insurance. then having the property repossessed, sells it for even more profit. OR holds onto the empty property and uses it as a loss write off at tax time.

never mind the homeowner is now living in a tent. (if that)

[Romulox]

2. This is SOP among all banks. It's deplorable.

This practice is not limited to Chase. No mortgage company's "loan modification department" will speak to homeowners until they are 2 - 3 payments behind. I've told many people that the loan modification department is a separate division of the bank; the foreclosure process goes forward while the homeowner is in talks with the modification department.