Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

U.S. Trustee Program Announces $50 Million Bankruptcy Settlement With JPMorgan Chase

You may recall the “robo-signing” scandal that erupted in 2010. Banks’ employees and contractors were improperly signing false mortgage or foreclosure documents and then executing them on homeowners. Apparently, some of these documents found their way into bankruptcy courts, meaning the lenders committed perjury as well. The U.S. Trustee Program, which among other responsibilities helps other federal departments investigate bankruptcy fraud cases, announced a $50 million settlement with JPMorgan Chase for filing 50,000 robo-signed documents—mostly payment change notices—in 25,000 bankruptcy cases.

About half of the payout will go 400 homeowners who received improper payment increase notices. They will receive mortgage credits and second loan forgiveness. The mean average payout will be $56,000 per homeowner.

Less significantly, JPMorgan Chase will pay 12,000 homeowners an average $900 for payment change notices that were not timely filed with bankruptcy courts. 18,000 homeowners will get $260 for receiving inaccurate or untimely escrow statements. Another $600 per loan will go to 8,000 homeowners who received payments to their escrow accounts that were inconsistent with the statements JPMorgan Chase submitted to them.

Finally, JPMorgan Chase will give $7.5 million to the American Bankruptcy Institute for its financial education activities.

JPMorgan Chase is also promising to alter its internal practices to ensure this robo-signing abuse doesn’t occur again. Whether that is meant to apply to its mortgagors who are in bankruptcy or all debtors in general is unclear. The lending giant will also acquiesce to a review by an independent auditor.

Additional information from the U.S. Trustee Program on the settlement can be found in its press release here.

Obviously homeowners who believe JPMorgan Chase acted wrongly in their bankruptcy proceedings can use separate means available to them. That can come in the form of a sanctions motion, for example. If you are a homeowner who went through bankruptcy and owed a mortgage to JPMorgan Chase, you should look into whether you are eligible for compensation. If you are facing foreclosure, then you should contact an experienced New York bankruptcy lawyer, especially if you think an improperly generated document might be responsible.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy trustee actions Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top