Chase Mortgage Modification Class Action Settlement Gets Preliminary Approval

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A federal judge on Wednesday granted preliminary approval to a proposed class action lawsuit settlement between JPMorgan Chase and homeowners who accuse the bank of failing to offer them loan modifications after they completed trials under the government run Home Affordable Modification Program or Chase’s own equivalent program.

Lead plaintiffs allege in the JPMorgan Chase mortgage modification class action settlement that the lender breached agreements it had made with the plaintiffs when JPMorgan did not provide loan modifications to homeowners who had entered into loan modification programs. According to the class action lawsuit, the homeowners entered into either government run HAMP trials or equivalent programs with the understanding that JPMorgan would permanently modify their home loans after they completed the program. These programs included stated-income trial period plans (TPP). The plaintiffs alleged that JPMorgan subsequently failed to modify their mortgage agreements.

According to settlement documents, Class Members of the JPMorgan Chase mortgage modification settlement include homeowners whose mortgage loan is or was serviced by Chase and who also participated in a stated-income TPP extended by Chase under HAMP and/or under another non-HAMP modification program.

To be eligible for the Chase mortgage class action settlement, homeowners must have made timely and sufficient trial payments as required by the TPP, and property may not have been foreclosed. Homeowners must also have either not received a permanent loan modification eligibility decision since the start of their trial period described in their stated-income TPP, or did receive an eligibility decision denying the loan for permanent modification during or after their trial period described in their stated-income TPP. Homeowners must also not currently be a debtor in bankruptcy proceedings to be eligible.

JPMorgan Chase has agreed to provide an opportunity for new loan modification applications based on homeowners’ current circumstances, as well as paid counseling assistance from qualified, independent, nonprofit organizations under the proposed settlement.

JPMorgan has also agreed, in most circumstances, to provide for stays of foreclosure to prevent foreclosure while homeowners apply for the settlement, as well as waive certain previously assessed fees and costs if the homeowners new application is approved and the homeowner agrees to a loan modification. Homeowners who qualify for the JPMorgan mortgage class action settlement will not receive a cash payment. Instead, they will receive a number of non-monetary benefits outlined here in our detailed breakdown of the JPMorgan Chase mortgage modification class action settlement.

The plaintiffs in the JPMorgan Chase mortgage modification class action lawsuit claimed that JPMorgan Chase was liable for breach of contract, unfair trade practices and other violations of the law in their complaint. In the settlement documents, JPMorgan Chase has denied any wrongdoing and contends that it has fully complied with the law.

In his May 28 approval order, U.S. District Court Judge Richard D. Sterns noted “[t]he Parties dispute the validity of the claims in this litigation, and their dispute underscores not only the uncertainty of the outcome, but also why the Court finds the Agreement to be fair, reasonable, adequate, and in the best interests of the Class Members.

A Final Approval Hearing is set for Oct. 8, 2014. Class Members that wish to remain a part of the class action settlement do not have to do anything now. They automatically will be eligible for the settlement benefits if the Court grants final approval to the settlement. More information can be found in our Open Settlements section or at the Settlement Administrator’s website, www.ChaseMDLSettlement.com.

The JPMorgan Chase Mortgage Modification Class Action Lawsuit  is In re JPMorgan Chase Mortgage Modification Litigation, MDL No. 2290, in the U.S. District Court for the District of Massachusetts.