Tags: JPMorgan | lawsuit | fees | mortgage

JPMorgan Must Face Lawsuit Challenging Mortgage Fees

Friday, 14 Jun 2013 03:48 PM

JPMorgan Chase & Co. must face a lawsuit accusing the largest U.S. bank of illegally imposing marked-up or unnecessary fees on delinquent mortgage borrowers, a federal judge ruled.

U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California. on Thursday rejected the bank's attempt to dismiss fraud and unjust enrichment claims by the plaintiff borrowers, who hope to represent classes of borrowers nationwide.

Rogers also dismissed racketeering claims against JPMorgan, but said the plaintiffs can try again to pursue them.

Mortgage servicers typically collect borrowers' payments, pay taxes and insurance, arrange loan modifications and pursue foreclosures.

JPMorgan is the nation's third-largest mortgage servicer, overseeing $1.08 trillion of loans in the first quarter, according to Inside Mortgage Finance of Bethesda, Maryland.

Rogers rejected the bank's argument that she lacked jurisdiction by virtue of its April 2011 settlement with U.S. regulators to address servicing and foreclosure deficiencies.

Seven other servicers were part of that settlement, including Wells Fargo & Co., Bank of America Corp. and Citigroup Inc.

JPMorgan was not immediately available for comment on the lawsuit, which was filed last July.

Similar lawsuits remain pending against Wells Fargo and Citigroup, respectively the largest and fifth-largest U.S. mortgage servicers, according to Inside Mortgage Finance.

The plaintiffs, who live in California, Tennessee and Oregon, accused the New York-based bank of imposing excessive or unnecessary fees to inflate profit, including on services performed by third party vendors, cheating thousands of already-strained borrowers out of millions of dollars.

They said the fees have included $95 to $125 charges for "broker's price opinions," which provide current estimated values for properties. The plaintiffs said such opinions cost as little as $30 to produce, and under guidelines of mortgage financier Fannie Mae should not cost more than $80.

© 2017 Thomson/Reuters. All rights reserved.

 
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JPMorgan Chase & Co. must face a lawsuit accusing the largest U.S. bank of illegally imposing marked-up or unnecessary fees on delinquent mortgage borrowers, a federal judge ruled.
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Friday, 14 Jun 2013 03:48 PM
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