JPMorgan Chase Mortgage Delays Elicit Class Action Lawsuit

A class action lawsuit was filed Tuesday against JPMorgan Chase Bank by a mortgage customer who alleges the bank has consistently failed to properly inform the New York county clerks office when mortgages have been satisfied either when the property is sold or the mortgage has been paid off.

The JPMorgan Chase mortgage class action lawsuit was filed by Amy Schwartz, who says there are two New York laws that obligate banks to send information to the appropriate county clerk when a mortgage is satisfied in its entirety, and banks are supposed to pay a fine, which can range anywhere from $500 for a 30 day delay, $1,000 for a 60 day delay, and $1,500 for a delay that is more than 90 days, the class action explains.

“One of the unfortunate consequences of the consolidation of the banking industry is that banks frequently fair to comply with their obligations to timely file mortgage satisfactions,” the JPMorgan Chase mortgage class action lawsuit says. “Indeed, mortgage satisfactions are filed months, if not years, after they are due, and sometimes not at all. This is no mere procedural peccadillo.”

Schwartz claims that Chase has failed to post timely satisfactions in thousands of cases.

Schwartz sold a property she owned in Hudson, New York on Jan. 5, 2012. The mortgage was originally through Wachovia Mortgage Corporation before it was transferred to Chase. The deed of the property was transferred to the buyers on Jan. 12, 2012. However, it wasn’t until April 3, 2012, 88 days later, that the satisfaction of mortgage was recorded by the Westchester County Clerk.

According to the class action lawsuit, the concern is if title companies are working with buyers and lenders to create clear title reports even though there are often “open” mortgages posted, it could result in a disruption to the system in New York for transferring residential property.

“There is a real possibility that a large loss by a title company as a result of the widespread failure of banks to timely present mortgage satisfactions may disrupt the entire system for transferring residential property in New York State,” the class action lawsuit says. “The failure to timely present a mortgage satisfaction can also frustrate landowners who need a marketable title to complete a property sale.”

Schwartz is charging Chase with violating two parts of the New York Real Property Acts Law that mandate that banks must post a satisfaction of a mortgage in 30 days and that they must pay a fee if this is not done in a timely manner.

She is suing for statutory damages.

The plaintiff is represented by David J. Cohen of Kolman Ely PC and D. Greg Blankinship and Shin Y. Hahn of Meiselman Packman Nealon Scialabba & Baker PC.

The JPMorgan Chase Mortgage Class Action Lawsuit is Amy Schwartz v. JPMorgan Chase Bank NA, Case No. 3;14-cv-00276, in the United States District Court for the Middle District of Pennsylvania.