A federal judge has ruled that JPMorgan Chase must face a class action lawsuit that claims it defrauded New Jersey residents who applied for the Home Affordable Mortgage Program, a federal program designed to help homeowners in danger of defaulting on their homes.
Chase opted into HAMP through Fannie Mae shortly after the plan was implemented in 2009. The plan is designed to lower homeowners’ monthly mortgage payments to sustainable levels, but New Jersey homeowners say they never got the benefits of the program. Instead, they say, Chase took the federal money designed to bail out homeowners and systematically rejected HAMP applications based on false claims that homeowners did not provide the appropriate documentation, even though many homeowners claim they did.
Lead Plaintiff Johny Thomas claims in the JPMorgan Chase mortgage fraud class action lawsuit that in October 2009, he and his wife were struggling on their home mortgage loan and requested a HAMP modification. Later than month, he claims Chase sent them a letter telling them they were eligible, but that they should sign up and pay for a trial-period plan.
Thomas says he and his wife made these trial payments for about six months, until they received a letter from Chase stating their application was declined because it did not meet an unspecified requirement, even though Thomas says he met all the requirements necessary. Chase then refused to apply several of the payments Thomas made before foreclosing on their home on August 2, 2010.
A second Plaintiff, Johnny Fields, makes the same allegations in the Chase HAMP class action lawsuit, saying that, just like Thomas, he applied for a HAMP modification on his mortgage in December 2009 and made trial payments. Just as in Thomas’s case, Chase eventually declined his application, citing inadequate documents, which Fields says he field. A year later Chase sent him a notice of intent to foreclose.
Thomas and fields filed separate class action lawsuits but later joined forces in a consolidated case against JPMorgan Chase in February, charging 10 separate claims. Last week, U.S. District Judge Shira Scheindlin dismissed eight of them, but ruled that JPMorgan Chase must stand trial for counts of violating the New Jersey Consumer Fraud Act and engaging in negligent misrepresentation.
The JPMorgan Chase Mortgage Fraud Class Action Lawsuit case is Johny Thomas and Johnny Fields, et al. v. JPMorgan Chase & Co. and Chase Home Finance, LLC, Case No. 10-cv-08993, U.S. District Court, Southern District of New York.
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