Military Mortgages to Get Fixed

JPMorgan Chase is fixing a problem it noticed with military mortgages this week. The bank, after noticing that members of the military had mistakes and overcharges on their mortgage, is trying to make things right by sending out 4,000 checks totaling $2 million to those who were affected by the mistakes.

According to reports, 14 military members were forced into foreclosure as a result of mistakes that the bank made. Thirteen of those cases have been resolved and Chase is working on resolving the final one so these homeowners can move back into their home.

The mistakes occurred on the files of military members who requested to have an explanation of their rights as service members sent to them. This is part of the Service Member’s Civil Relief Act. However, the mistakes were not recognized until a Marine fighter pilot filed a lawsuit against the bank in federal court. Under the aforementioned act, members of the military have special protections when it comes to mortgages. One of those protections includes the requirement of the bank to give the military member mortgage rates of six percent if the loan was entered into before the person went into active duty.

According to Marine Captain Jonathon Rowles, Chase violated several aspects of the relief act for service members. For one thing, the bank did not give the proper date for reducing the interest rate on the mortgage. As a result, he had to reapply several times for the protection before actually receiving it. Chase also tried to collect on “inaccurate account balances.” Rowles took out a $255,000 interest-only mortgage loan in February 2004 with an adjustable rate. He entered into active duty almost two years later. His mortgage was sold to Chase just a few months after he signed the loan papers.

A spokesperson for Chase said the bank was aware of the problems before Rowles filed his lawsuit. The bank was investigating the mistakes and was looking for a way to make them right. However, once the lawsuit against Chase was filed, those investigations intensified. As a result of the reviews of military members’ mortgage accounts, the bank has a newly trained team specifically for working with military customers to help prevent this type of problem in the future.

Currently, Senator Jack Reed (D-RI) and another senator are trying to get the federal government in the mix by pushing for more investigations into improper banking practices with it comes to mortgage protections. He said that Chase violated the law and there may be other banks doing the same thing.

We’ll keep an eye on this story and report any new information that occurs in the weeks and months to come.