SAN FRANCISCO (CN) – A federal class action claims JPMorgan Chase and Chase Bank exploit the Troubled Asset Relief Program by promising distressed homeowners loan modifications under the program, demanding a large upfront fee for appraisals and then refusing the loan.
“These programs were set up to assist homeowners that were in danger of foreclosure of their home, and customers are encouraged by both the federal government and the defendants to apply for one of the home loan modification programs,” lead plaintiff Randall Stevens says. But he says Chase Bank has “turned the up-front loan modification fees taken from the unqualified customers into a profit center, thereby putting these customers into an even worse financial position than they were before applying for the loan modification program.”
Stevens says he forked over a $750 loan modification application fee after a JPMorgan representative told him he qualified for loan modification under TARP. JPMorgan allegedly claimed the fee would be put toward “the cost of an appraisal, title search and processing of the paperwork.”
Stevens says JP Morgan sent a representative to his home who had no knowledge of the real estate market in his area, and appraised it for “substantially less than the amount of the loan.”
He says JPMorgan did not notify him that his loan modification had been denied until he called to inquire about it. Then JPMorgan refused to refund his fee.
“I believe people are being taken advantage of here, and there needs to be some government intervention,” said class counsel Richard McCune.
McCune said that JPMorgan did not tell Stevens the fee was nonrefundable until after it denied his application.
“He never would have given them that money if he knew he wouldn’t qualify for the program,” said McCune.
The class demands restitution and punitive damages for fraud and negligent misrepresentation. McCune works with McCune & Wright of Redlands.