Chase HELOC Class Action Settlement
By Kimberly Mirando
JPMorgan Chase Bank has reached a class action lawsuit settlement over allegations it improperly suspended or reduced home equity lines of credit (“HELOCs”) based on false claims that the homes had significantly declined in value.
The Chase HELOC settlement will resolve a class action lawsuit, titled In Re: JP Morgan Chase Bank Home Equity Line of Credit Litigation, that alleges Chase violated the Truth-in-Lending Act and violated customers’ HELOC Agreements and consumer protection laws by suspending or reducing their HELOCs even though their property did not significantly decline in value.
Chase denies the allegations, but has reached a class action lawsuit settlement to resolve the litigation.
Class Members include all Chase HELOC customers in the United States who had their home equity line of credit suspended or reduced by Chase between January 1, 2007 and September 30, 2012 based on its determination that the property had significantly declined in value.
The settlement also includes a subclass of former customers who, as of September 30, 2012, had closed their HELOC account during the time their account was still suspended or reduced based on Chase’s determination that their property value had significantly declined.
If the Chase class action lawsuit settlement is approved and becomes final, Class Members will receive a number of benefits, including:
Notice of Right to Request Reinstatement. Chase will send a Notice of Right to Request Reinstatement to Class Members whose HELOC accounts are open and still suspended or reduced due to a decline in property value, and who have more than 90 days left to draw from the account as of the date the Settlement becomes final. The Notice of Right to Request Reinstatement will explain that Chase has revised some of its standards for reinstating HELOC accounts and that Class Members may be considered for reinstatement or partial reinstatement under Chase’s revised policies. It will also inform Class Members that they have the right to request reinstatement.
Proactive Offer of Account Reinstatement. Chase will proactively offer account reinstatement to certain Class Members who satisfy Chase’s current internal property value and credit guidelines and other criteria. Within 90 days of the date the Settlement becomes final, Chase will send a letter to qualifying Class Members offering reinstatement of their HELOCs up to a limit set by Chase. The Class Member may accept Chase’s offer to reinstate the HELOC by checking a box indicating acceptance and returning the letter to Chase. Class Members who fail to check the box and timely return the letter to Chase will not have their HELOC reinstated through the Proactive Offer of Account Reinstatement Process.
Limitation on Use of Automated Valuation Models (AVMs). For one year after the date the Settlement becomes final, Chase will not rely on its Tier 3b, 4b or 5b AVMs when determining whether to suspend or reduce a HELOC due to a decline in property value.
Enhanced Account Treatment Notices. For one year after the date the Settlement becomes final, all of Chase’s notices informing HELOC customers that their account is being suspended or reduced due to a decline in property value will include an appraisal amount that will be needed in order to reinstate the HELOC.
Reimbursement of Appraisal Fee. For one year after the date the Settlement becomes final, Chase will continue its policy of providing refunds of any appraisal fees paid by customers who successfully appeal the suspension or reduction of their HELOC based on a significant decline in home value.
Limitation on Use of 5% reduction criterion for future reductions and suspension. For one year after the date the Settlement becomes final, for future reductions and suspensions, Chase will limit its use of a 5% reduction in value criterion as an indication of a significant decline in home value to “high CLTV” situations, i.e., when a borrower’s combined loan-to-value ratio is 90% or more.
Service Assurances. For one year after the date the Settlement becomes final, Chase will only use AVMs that have gone through its testing and validation processes. In addition, Chase will not make any substantial changes to its customer service processes for: (i) notifying borrowers of account suspensions or reductions; and (ii) addressing customer requests for reinstatement, unless the changes benefit borrowers.
Payments to Subclass Members. Subclass Members who complete and submit valid Claim Forms stating that they were damaged by the suspension of their HELOC may receive a cash payment in the amount of $35.
Subclass Members must submit a Claim Form by April 7, 2013 to receive a $35 cash payment.
Claim Forms and more information on your rights in the Chase HELOC Class Action Lawsuit Settlement can be found at www.ChaseHELOCSettlement.com.
Updated January 14th, 2013
All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions
18 thoughts onChase HELOC Class Action Settlement
I called Chase asking how to reinstate my HELOC account. I was told by a rep that I need to refinance. I just realized that there was a class action lawsuit settlement that gives Notice of Right to Request Reinstatement to Class Members. I did not receive that notice. I wish Chase can just reinstate and make it easier to bank with.
That is exactly what happened to me. They lied and told me I needed to reapply. To fool me into letting the deadline pass. The only solution is to NEVER do business with Chase. Ever.
I requested to reinstate my heloc and was denied based upon an AVM model which says could not determine the value. I just had a appraisal done one year ago and it came it at 850K, talked to several realtor specialist in my area who both said the market has increase ~20% in the last year. My loan and heloc combined are only 540K, wtf? Well over the threshold for 75%, any suggestions. I just don’t believe they were ever going to do so unless I pay for their appraiser to do another at a whopping 500+, total scam.
Has anybody not yet received any follow up offer to reinstate since the settlement? I received the initial notice but nothing since. Have I missed out on the opportunity to have the line re-opened?
I agree. The crooked liberal courts and the crooked fractured–fractionalized banking sys. is screwed.
In ’06 I had a condo worth $425,000. I owed $211,000. I had to take the mandatory draw. I made the first payment,and my statement showed Credit Line $140,000. Available for use $0.00. It has remained thus. I make ALL payments on time and more than the min.—WTF America. Had I known the damn liberals in Congress would have screwed U.S.–as Congress and Dodd-Frank,—I would have removed all MY!!!! equity and bought Gold/Silver and gone Cha. 7. Get it? Now, because of ALL you fool libs, we good folks lost BIG time, and have to pay for this “BS” settlement too—FMTT!
Now the screwed up system is screwing U.S. again with this liberal insulting offer. BTW since 07 my Condo has only “appraised” at 220,000. I owe 255,000.
I am ANGRY about this issue.
Robert
You have it backwards. The creation of the Consumer Protection Bureau was a democratic idea. Elizabeth Warren to be specific. To help protect you against crooked banks. The Republicans tried to kill it because they are on the side of the banks – not you. The liberals are trying to help you. The Republicans are trying to help the banks. How did you get this 100% backwards?
About a week ago I called chase nd told them I wanted to reinstate my equity line to the full amount as promised in the settlement agreement. Today I received notice they had sold or transferred the loan. I assume to avoid the reinstatement. I consider this a violation of the settlement agreement. They sold to another chase division. How clever of them. Another class action brewing?
Same thing happened to me- My house is not worth what it was and they will only give you a reinstatement if your property value is recovered to their original value of the property- which is now totally inflated— all a JOKE!!! They make you pay for an apprasial and they know it will not be what the original value was…. In essence, no one will be eligible for this!!