MANHATTAN (CN) – JPMorgan Chase cannot shake a class action that claims it defrauded New Jersey residents who applied for the Home Affordable Mortgage Program, a federal initiative to help homeowners in danger of defaulting on loans, a federal judge ruled.
The Troubled Asset Relief Program directed the U.S. Department of the Treasury to “implement a plan that seeks to maximize assistance for homeowners,” which spawned Making Home Affordable Program and Home Affordable Mortgage Program (HAMP) in February 2009.
Months later, Chase opted into the program through Fannie Mae, taking part in a plan designed to lower homeowners’ monthly mortgage payments to sustainable levels.
Two New Jersey men, Johny Thomas and Johnny Fields, say they never got the benefits of the program.
In October 2009, Johny Thomas and his wife (who is not a party to the lawsuit) say they were struggling on their home mortgage loan, and requested a HAMP modification.
Later that month, Chase sent them a letter telling them that they were eligible, but that they should sign up and pay for a trial-period plan within a month. Thomas said he and his wife made these trial payments for about half a year, until their application was declined in a letter falsely stating that the application did not meet an unspecified requirement.
Chase refused to apply several of the payments before foreclosing on their home on Aug. 2, 2010, Thomas said.
Johnny Fields applied for a HAMP modification to his mortgage in December 2009, and he says he made trial payments like his co-plaintiff. But Chase eventually declined his application, citing inadequate documentation, which Fields says he filed.
About a year later, Chase allegedly sent him a notice of intent to foreclose.
Thomas and Fields joined forces in an amended class action complaint on Feb. 15, charging 10 separate claims.
On Friday, U.S. District Judge Shira Scheindlin booted eight of them, but ruled that the mega-bank must stand trial for counts of violating the New Jersey Consumer Fraud Act and engaging in negligent misrepresentation.
Attorneys for both parties did not immediately reply to phone requests for comment.