Families Suing JPMorgan Chase Over Illegal Foreclosure On Active Military Personnel

I'm proud to be an American, and I am a strong supporter of our troops fighting overseas in the War on Terror. So it upsets me to hear about the recent scandal involving JP Morgan Chase illegally foreclosing on the homes of active military personnel. In a nutshell: according to federal law, most active troops can get their mortgage interest rates reduced to 6 percent, and the banks are not allowed to foreclose. This is all in the Service members Civil Relief Act.

This week, Chase announced that it had been charging the wrong interest rates to over 4,000 servicement who had been granted teh 6 percent rate, that error resulted in 14 illegal foreclosures.

Chase announced they would refund about $2 million to the families they overcharged, and that 13 of the 14 improper foreclosures had already been resolved. Now, while 13 of those 14 families (supposedly) have roofs over their heads again, the fact that it happened in the first place is disturbing. Illegal foreclosure is a problem that has come to light recently as a result of the robo-signing scandal.

While Chase officials are declining to give interviews, they released this statement: "While any customer mistake is regrettable, we feel particularly badly about the mistakes we made here."

Good job, Chase. We're glad you feel bad about what you're mistakes. Now what do you plan on doing about it?

At least one of the families affected wants an answer, they've filed what they hope will become a class action lawsuit against Chase. In the words of their attorney Dick Harpootlian, a former prosecutor, "Everybody that got caught taking money that wasn't theirs always said they were sorry, offered to give it back and call it even. And that's just not what ought to happen in cases like this."

I can't even imagine what the families of these active duty military personnel had to go through. It's tough enough to be faced with the thought of a loved one serving overseas, without having to worry about losing your home. Not to mention the incredibly unnecessary stress added to the already difficult lives of the soldiers affected.

If you're facing foreclosure , there is help (and not just for military personnel). There are sections that exist in the bankruptcy code that allow you to reorganize your debt, while keeping a roof over your family's head and food on the table.


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James Brown is a personal bankruptcy attorney in St. Louis, Missouri. He has filed over 30,000 bankruptcy cases and published many books and articles. You can request his free Missouri and Illinois bankruptcy guide for the best tips on how to prepare for your bankruptcy and find a great bankruptcy attorney.