JP Morgan Chase Says it Overcharged, Wrongfully Foreclosed on Military Families

JP Morgan Chase appears to have violated the Servicemembers Civil Relief Act (SCRA) by overcharging military families on their mortgages. The nation’s second largest bank has also admitted that it <"">wrongfully foreclosed on more than dozen military members.

The SCRA is designed to protect troops and their families from financial stress while they’re in harm’s way. Under the act, active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure.

But according to an NBC News report, an official with JP Morgan Chase has admitted that some 4,000 troops may have been overcharged. Even worse, 14 military families were wrongfully foreclosed.

JP Morgan Chase chief communications Officer Kristin Lemkau said in a statement that the bank will begin mailing a total of about $2 million in refunds to families that may have been overcharge this week. The wrongfully foreclosed families have or will be getting their homes back, the statement said. According to NBC, the bank insists the “mistakes were inadvertent, not malicious.”

According to the NBC report, the JP Morgan military mortgage fiasco only came to light due to a lawsuit filed by Marine Capt. Jonathan Rowles, and his wife Julie. Capt. Rowles, a Marine for five years and the pilot of an F/A 18 Delta fighter jet, told NBC that when he went on active duty in 2006, interest on his adjustable rate mortgage – which was rising – should have been lowered to 6 percent. But JP Morgan Chase took months to lower the rate, and was overcharging the Rowles by as much as $900 per month.

The bank finally got it right in the fall of 2006 – or so the Rowles thought. Two years ago, JP Morgan Chase began hitting them with collection calls, as many as three a day, claiming they owed as much as $15,000, they told NBC. The callers sometimes threatened to take the house and report the family to a credit agency, even though the Rowles didn’t owe the bank anything, and hadn’t ever missed a house payment.

It turns out that while the family was making payments on their mortgage at 6 percent, the bank wrongly had been charging them at rates above 9 or 10 percent. Even the bank admits the Rowles did everything they were supposed to do.

JP Morgan Chase now claims that it’s working on fixing the problems for other military members.

“We now have a dedicated team in place devoted to servicing home loans for military personnel —the members of our military deserve nothing less. We welcome the opportunity to talk to Captain Rowles and others who would like to discuss their account,” Chase spokeswoman Lemkau told NBC news.

The bank also claims that it has refunded the Rowles family all of the overcharges, but Capt. Rowles and his wife dispute that. They are now suing JP Morgan Chase to get justice for themselves and for other military families in the same situation, NBC said.

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