Chase SCRA Class Action Settlement

Chase Home Finance has reached a class action lawsuit settlement over allegations it violated the Servicemembers Civil Relief Act (SCRA) by failing to provide certain protections to Servicemembers’ mortgage loans, home equity loans, and lines of credit while they were on active duty and immediately following active duty. As a result, certain Servicemembers will receive cash payments if they borrowed from Chase, Washington Mutual or EMC as of January 1, 2005.

According to the Chase SCRA class action lawsuit, entitled Rowles v. Chase Home Finance, LLC, Chase violated the SCRA by not systematically or properly reducing the interest rate for eligible loans, and foreclosing upon and negatively reporting the creditworthiness of SCRA-protected borrowers. Plaintiffs further claimed that Chase subjected SCRA-protected borrowers to improper collection calls that were the result of Chase’s failure to adequately apply SCRA protections.

Under the SCRA, Chase is required to limit the interest rate on certain home equity and mortgage loans held by Servicemembers to six percent for the duration of their active duty and a period of one year thereafter. The SCRA also provides protection from foreclosure on certain home equity and mortgage loans while a Servicemember is on active duty and, beginning July 31, 2008, for nine months following active duty. The foreclosure protection applies only to home equity and mortgage loans that were originated prior to active duty. The SCRA also protects Servicemembers from any adverse reporting related to their creditworthiness based solely on invocation of SCRA protection.

Chase denies the allegations in the SCRA class action lawsuit, but conducted an internal investigation upon learning of the complaint. In any instance where that investigation revealed that a Servicemember potentially did not receive the full protection afforded by the SCRA in connection with the servicing of a home loan since January 1, 2005, Chase has issued, or will issue, a refund check. To date, refunds exceeding $18.9 million for approximately 13,500 loans have been issued. Chase has also corrected any negative credit reporting that occurred during a Servicemember’s period of SCRA protection.

Chase has also provided several significant programs to further assist Servicemembers. Details on these enhancements can be found at www.ChaseSCRASettlement.org.

 

Class Members of the Chase SCRA class action settlement include borrowers whose mortgage loan, or secured home equity loan or home equity line of credit, was active and serviced by EMC, Washington Mutual and/or Chase as of January 1, 2005, and who were sent or will be sent a refund from Chase in connection with its investigation of potential SCRA compliance breaches.

 

There are two class action settlement funds to pay all Class Member claims in this case: Fund I consists of $12 million and Fund II consists of $15 million.

Fund I will pay Class Members an amount based on the initial amount of the refund calculated by Chase. Class Members will receive from Fund I either $100 or an estimated 6.3 times the Original Estimated Refund, whichever is greater. For example, if your refund was $1,000, your estimated Fund I payment would be $6,200. Class Members of the Chase SCRA class action settlement will automatically receive a payment from Fund I.

Class Members are also eligible to submit a Special Claim Form for additional cash benefits as compensation for emotional distress, pain and suffering, economic loss, and/or credit defamation. To make a claim for an award of compensation from Fund II, you must submit the Special Claim Form and any accompanying information either online at www.ChaseSCRASettlement.org or postmarked to the Settlement Administrator on or before February 13, 2012.

The amount a Class Member may be awarded, if any, from Fund II will be determined by a Special Master appointed by the Court.

More information on your rights in the Chase SCRA Class Action Lawsuit Settlement can be found at www.ChaseSCRASettlement.org.