In Harrisburg, Pennsylvania, The Morning Call
- A federal lawsuit filed six years ago(1) alleging that more than 100 home buyers were defrauded by JP Morgan Chase Bank and a Poconos builder will finally go to trial in February. U.S. District Judge Christopher C. Conner on Friday set a Feb. 2, 2009 trial date in Harrisburg. Conner scheduled the trial date after denying yet another bid by Chase to dismiss the case, saying the record supports the conclusion that Chase aided the alleged scheme.
- The suit claims that Chase took part in the alleged scam by ignoring its usual underwriting guidelines in approving mortgages for [homebuilder Gene] Percudani's customers, many of whom were people with poor credit from the New York area.(2) [...] Saddled with mortgages higher than the real value of their homes, many of the home buyers were unable to sell or refinance their mortgages and were forced into bankruptcy and foreclosure while others suffered financial hardships, according to the suit.
- Chase Manhattan Mortgage, a division of JP Morgan Chase, denied the allegations, saying in court documents that Percudani was a rogue builder who duped Chase into making the loans.
For more, see Poconos mortgage suit set for February (Lawsuit alleges 100 buyers defrauded by bank and builder).
(1) Filed in 2002, the suit alleges that Tannersville homebuilder Gene Percudani, Chase Manhattan Mortgage, Stroudsburg appraiser Dominick Stranieri and several others engaged in widespread fraud by selling homes in Monroe County at inflated prices through several of Percudani's companies, including Raintree Homes, Why Rent? and Chapel Creek Mortgage; according to the story.
(2) According to the story, the mortgages, once approved by Chase, were quickly sold to the secondary market, typically Freddie Mac and Fannie Mae. After learning of the alleged fraud in 2001, Freddie Mac investigated and subsequently forced Chase to repurchase its Percudani mortgages. Freddie Mac also placed Percudani on its ''exclusionary list,'' which barred Percudani from doing business with Freddie Mac.