JPMorgan Chase vows to fix mistakes on military members

Kimberly Miller, Palm Beach Post

Banking powerhouse JPMorgan Chase made an extraordinary mea culpa to America’s military personnel Tuesday with promises to reduce home loan payments for struggling borrowers and end foreclosures on active-duty service members.

The actions, which include donating 1,000 homes to members of the military and veterans, come a week after bank leaders told a congressional committee they wrongly foreclosed on the homes of active-duty personnel who were exempt under the Servicemembers Civil Relief Act. The bank also told the House Veterans Affairs Committee that it unintentionally violated the act by charging armed forces personnel interest rates above 6 percent.

A Chase spokeswoman declined to comment Tuesday on whether any of the service members affected live in Florida.

“This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration,” said Jamie Dimon, chairman and chief executive of JP­Morgan Chase . “We deeply apologize to our military customers and their families.”

According to testimony at the Feb. 9 committee meeting, Chase overcharged at least 4,500 service members and improperly foreclosed on 18 homes. About $2 million has been dedicated to paying back those who were overcharged. Chase said it will rescind the sales of homes that have not been resold and forgive the remaining mortgage debt.

Rep. Cliff Stearns, R-Ocala, a member of the House Veterans Affairs Committee, was not overly impressed by the actions.

“Considering that this financial institution received $25 billion in TARP funds, yet only paid out $2 million in funds for economic, punitive and pain and suffering damages to our veterans, one would wonder how fair they really were with our veterans,” Stearns said Tuesday. “These abuses could only be the tip of the iceberg.”

Stearns said as a result of last week’s House meeting he is requesting a study be conducted of industry practices by the Government Accountability Office.

Under the programs announced Tuesday, Chase will not foreclose on any deployed military personnel.

Internal breakdowns at Chase were blamed for the problems, but leaders also said during the committee meeting that it could be an industrywide issue.

In Florida, beyond a bank’s internal checks, military status should be determined when a foreclosure summons is served. A non-military affidavit is supposed to be filed with the courts before a default judgment can be entered.

But a former employee of the Law Offices of David J. Stern told investigators from the Florida attorney general’s office that military checks were sometimes falsified.

The former employee, Tammie Lou Kapusta, said she was fired two weeks after she refused to fake the military checks.

Military borrowers with questions about a Chase loan can call (877) 469-0110 for mortgage questions or go to www.chasemilitary.com .

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