Sunday, April 17, 2011

Lawsuit: Chase Gave WV Couple A Loan Modification 'Jerk-Around' After Squeezing Them For Retroactive Charges On Force-Placed Insurance

In Huntington, West Virginia, The West Virginia Record reports:
  • A Lesage couple is suing JPMorgan Chase Bank and Chase Home Finance after they claim the bank breached its contract with them.
  • Denise Ash and Matthew Ash purchased their home in 2003 for $91,000, which was financed with a loan through First Franklin Financial Corporation, according to a complaint filed March 24 in Cabell Circuit Court. The couple claims the loan was ultimately assigned to JPMorgan Chase Bank and the servicing of the loan was assigned to Chase Home Financial.
  • In the summer of 2010, Chase Home Financial informed the Ashes that it would be raising their payments from $680 to $1,190 for repayment of force-placed insurance over the previous two years,(1) according to the suit.
  • The couple claims they contacted Chase because they were concerned about being able to afford the new payment and a representative suggested they apply for a loan modification and stated that the couple should not may any payments until the loan modification was processed.
  • In August 2010, the Ashes were denied their loan modification request. Unable to pay the total amount of the arrears, they requested any other loss mitigation assistance, according to the suit. The Ashes claim in January they received a second offer to consider them for a loan modification, so they sent Chase the documentation it requested. On Feb. 24, Chase's foreclosure trustee informed the Ashes that their loan was accelerated in advance of a foreclosure sale.
  • The Ashes claim the defendants breached their contracts and duty of good faith by exercising their discretion under the contract in bad faith.

According to the lawsuit, the defendants breached their contracts and duty of good faith:

  1. by discouraging the Ashes from making payments on the loan;
  2. by representing to the Ashes that hardship assistance was forthcoming;
  3. by exercising their discretion in bad faith in refusing to provide the Ashes with a loan modification as represented; and
  4. by referring the couple's home to foreclosure.

The Ashes are seeking actual, compensatory and punitive damages and civil penalties, and are being represented Bren J. Pomponio and Daniel F. Hedges.(2)

Source: Lesage couple sues Chase for breach of contract.

(1) For more on the loan servicing industry's force-placed insurance racket, see South Florida Homeowners Seek Class Action Status In Lawsuit Tagging Loan Servicer Over Dubious, Force-Placed Insurance 'Gravy Train'.

(2) Both attorneys are associated with Mountain State Justice, a non-profit public interest law office that provides free legal services in their areas of practice to qualifying, low-income West Virginians, and whose work currently focuses primarily on combating predatory lending and abusive debt collection techniques through individual and class action lawsuits.

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