4/6/2010
Source: Arthur Delaney, Huffington Post
JPMorgan Chase told a California couple to quit making mortgage payments in order to qualify for a loan modification but then foreclosed on their Sacramento home, according to a lawsuit filed in federal court.Faiz and Khadija Jahani called Chase in December 2008 because they were having trouble making their mortgage payments. According to the suit, they were told that they wouldn't qualify for a modification without being delinquent and that they should stop making payments for three months. At the beginning of June, the Jahanis claim that they were told they qualified for a modification that reduced their monthly payments. Thr ee weeks later, they received a letter telling them the bank intended to foreclose. This confusing back-and-forth continued for months, with Chase repeatedly asking them to resend paperwork, according to the complaint filed in U.S. District Court, Eastern District of California/Sacramento Division, which was first reported by Courthouse News.The couple is demanding damages of $150,000 for breach of contract, fraud, predatory lending and violation of the Fair Credit Reporting Act.In October, a real-estate investor knocked on the Jahanis' door and asked them about buying the house, telling the couple that it was a bank-owned property. When the Jahanis called Chase to find out what was going on, they claim they were reassured that the bank had not foreclosed on the house."They kept getting conflicting information," said lawyer Piotr Reysner. He added that, as far as he can tell from public records, the bank did in fact foreclose on the property. "Unfortu nately, they face a situation right now where they could easily get a three-day notice to quit the house." Chase did not immediately respond to a request for comment. Reysner, a bankruptcy attorney, said he did not know whether the Jahanis had been pursuing their modification via the Obama administration's Home Affordable Modification Program, which started in spring 2009 and gives banks incentives to modify mortgages for hard-luck homeowners. Banks are not allowed to foreclose on borrowers eligible for the program, but they are allowed to move forward with the foreclosure process during a trial modification, a source of much confusion for borrowers everywhere."The fact that a servicer is telling a homeowner that they're taking care of the matter and, while they're negotiating, the house moves into foreclosure is a completely common scenario in today's foreclosure world," said Ira Rheingold, director of the National Association of Consumer Advocates.In March, HuffPost reported on Indiana law student Melissa Stua rt, who had been making monthly payments under HAMP, only to be told when the trial period ended that she was delinquent. Stuart ultimately won a permanent modification.
Source: Arthur Delaney, Huffington Post
JPMorgan Chase told a California couple to quit making mortgage payments in order to qualify for a loan modification but then foreclosed on their Sacramento home, according to a lawsuit filed in federal court.Faiz and Khadija Jahani called Chase in December 2008 because they were having trouble making their mortgage payments. According to the suit, they were told that they wouldn't qualify for a modification without being delinquent and that they should stop making payments for three months. At the beginning of June, the Jahanis claim that they were told they qualified for a modification that reduced their monthly payments. Thr ee weeks later, they received a letter telling them the bank intended to foreclose. This confusing back-and-forth continued for months, with Chase repeatedly asking them to resend paperwork, according to the complaint filed in U.S. District Court, Eastern District of California/Sacramento Division, which was first reported by Courthouse News.The couple is demanding damages of $150,000 for breach of contract, fraud, predatory lending and violation of the Fair Credit Reporting Act.In October, a real-estate investor knocked on the Jahanis' door and asked them about buying the house, telling the couple that it was a bank-owned property. When the Jahanis called Chase to find out what was going on, they claim they were reassured that the bank had not foreclosed on the house."They kept getting conflicting information," said lawyer Piotr Reysner. He added that, as far as he can tell from public records, the bank did in fact foreclose on the property. "Unfortu nately, they face a situation right now where they could easily get a three-day notice to quit the house." Chase did not immediately respond to a request for comment. Reysner, a bankruptcy attorney, said he did not know whether the Jahanis had been pursuing their modification via the Obama administration's Home Affordable Modification Program, which started in spring 2009 and gives banks incentives to modify mortgages for hard-luck homeowners. Banks are not allowed to foreclose on borrowers eligible for the program, but they are allowed to move forward with the foreclosure process during a trial modification, a source of much confusion for borrowers everywhere."The fact that a servicer is telling a homeowner that they're taking care of the matter and, while they're negotiating, the house moves into foreclosure is a completely common scenario in today's foreclosure world," said Ira Rheingold, director of the National Association of Consumer Advocates.In March, HuffPost reported on Indiana law student Melissa Stua rt, who had been making monthly payments under HAMP, only to be told when the trial period ended that she was delinquent. Stuart ultimately won a permanent modification.
As screwed up as the banks are, I have no problem believing that they processed a foreclosure while also telling the Homeowner that they are working with them.
ReplyDeleteHowever, I find it hard to believe that the lender would TELL them to stop making payments. It's more likely that they said there wasn't anything they could do unless the Seller is behind.
It seems to me that the more federal programs created to make the situation better is just making it progressively worse.