Morales v. Chase Home Finance, LLCUnited States District Court, Northern District of California Case Number CV 10-2068Case Type: Consumer rights, mortgage and lendingStatus: Class action filed on May 14, 2010On May 14, 2010, The Sturdevant Law Firm and co-counsel Housing and Economic Rights Advocates (HERA), filed a class action against Chase Bank’s failure to comply with its obligations under federal programs designed to modify mortgages. The federal program, Home Affordable Modification Program ("HAMP"), is designed to ensure that thousands of California residents would be able to make affordable payments on their mortgages rather than lose their homes. HAMP was implemented to stem the foreclosure crisis by providing affordable mortgage loan modifications and other alternatives to foreclosure to eligible borrowers. Companies that accepted money under TARP are subject to mandatory inclusion in HAMP.
The Complaint alleges that Chase has serially extended, delayed, and otherwise hindered the loan modification process. As A result homeowners with loans serviced by Chase, who meet requirements for participation in the HAMP program have not received the permanent loan modifications to which they are entitled. Chase profits from extending trial periods and from foreclosing rather than modifying loans. Instead of complying with its contracts to enter into permanent mortgage modification with individual borrowers and the federal government, Chase has bowed to the many powerful financial incentives for it to delay or avoid permanently modifying the loans that it services. For example, fees that Chase charges its borrowers who are in default and unpaid interest are often added to the principal of the loan, thereby increasing the balance on the pools of loans Chase services and the fees it charges to the holders of the loans. In April, 2010 Chase had 431,341 HAMP-eligible loans in its servicing portfolio. Only 7% of the eligible pool of loans have resulted in permanent modifications, even though many more homeowners had made the payments and submitted the documentation required.
The lawsuit was brought by two California homeowners who have been wrongfully deprived of an opportunity to enter into permanent modifications that would cure their delinquencies, pay their mortgage loans, and save their homes. Chase’s actions violate its contractual obligations, thwart the purpose of HAMP, and are illegal under California law.
If you would like more information about this case, please contact Whitney Huston or Kathy Becker at (415) 477-2410. Thank you.
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