JPMorgan Chase to pay $50 million in settlement on robo-signing mortgage documents, other improper practices in bankruptcy court
JPMorgan Chase will pay more than $50 million – including cash payments, mortgage loan credits, and loan forgiveness – to over 25,000 homeowners who are or were in bankruptcy.
Chase will also change internal operations and submit to oversight by an independent compliance reviewer.
In the proposed settlement with U.S. Department of Justice’s U.S. Trustee Program, Chase admitted that it filed more than 50,000 payment change notices in bankruptcy courts across the country that were signed by people who hadn’t reviewed the notices.
More than 25,000 notices were signed with the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings. The rest of the notices were signed by people employed by a third party vendor who had other work assignments.
“It is shocking that the conduct admitted to by Chase in this settlement, including the filing of tens of thousands of documents in court that never had been reviewed by the people who attested to their accuracy, continued as long as it did,” said Acting Associate Attorney General Stuart F. Delery. “Such unlawful and abusive banking practices can deprive American homeowners of a fair chance in the bankruptcy system, and we will not tolerate them.”
Payments, credits, and contributions of more than $50 million
In the proposed settlement, Chase agrees to:
- Provide $22.4 million to about 400 homeowners who received inaccurate payment increase notices during their bankruptcy cases.
- Pay $10.8 million to more than 12,000 homeowners for payment-increase notices that weren’t filed on time.
- Pay $4.8 million to more than 18,000 homeowners who didn’t receive accurate and timely escrow statements.
- Pay $4.9 million, through payment of about $600 per loan, to more than 8,000 homeowners whose escrow payments were inconsistent with escrow statements.
- Contribute $7.5 million to the American Bankruptcy Institute’s endowment for financial education and support for the Credit Abuse Resistance Education Program.
Chase contact information
Homeowners with questions about the settlement can contact Chase at 866-451-2327.
The proposed settlement is subject to court approval.
The U.S. Trustee Program is part of the Justice Department that oversees case administration of bankruptcy laws.