Lanza & Smith, PLC

Lanza & Smith
A Professional Law Corporation

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Irvine, CA 92614
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Federal Lawsuit v. EMC & Chase

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Consumer Protection Lawsuit

On September 16, 2010, Lanza & Smith filed a class action lawsuit against EMC Mortgage ("EMC") and JP Morgan Chase Bank ("Chase") alleging that EMC and Chase committed loan fraud in their mortgage loan servicing business. EMC and Chase are in the business of servicing mortgage loans on behalf of lenders and investors, including pooled mortgage security investments. EMC is a subsidiary of JP Morgan Chase.

This consumer protection action was filed in Orange County, CA, on behalf of class representative Jean Wilcox, and then later Michele Hood and Sharie Green as well, plus other California residents who unsuccessfully applied for loan modifications. The action was then consolidated with other similar lawsuits across the nation and transferred to Multidistrict Litigation in Boston, Massachusetts.

It is estimated that the potential class may include many thousands of homeowners who were denied loan modifications -- while struggling to keep their homes through the recent recession. The Court has not yet decided whether the case will be certified as a class action.

Potential Class Action Settlement
Chase has recently agreed to settle certain claims that were part of the Multidistrict Litigation in Boston. The Judge has preliminarily approved that settlement. If you are a settlement class member, you should receive notice (by U.S. Mail to your home) in roughly January 2014. That notice will explain the proposed settlement in detail. If you are not a class member, you will not receive notice, but you will not thereby relinquish any rights that you may have to pursue claims independently against Chase.

The settlement administrator is Kurtzman Carson Consultants, LLC, in Rode Island. Kurtzman is sending notice (including all appropriate details) to homeowners who might qualify as class members. Kurtzman is also creating a website and a dedicated phone number.

Although the lawyers in this firm are only licensed in California, the proposed settlement (if approved) would cover the entire nation. This law firm is not lead counsel in this Multidistrict Litigation, and we represent only Jean Wilcox, Michelle & Robert Hood, Sharie Green, Jim Dana, and Laura Struble, unless and until a class is formally certified - assuming that occurs.

Mortgage Allegations
The lawsuit alleges that EMC and Chase defrauded home owners who were seeking to modify their loans. According to the legal complaint, EMC and Chase: a) repeatedly failed to grant loan modifications as promised, misrepresented the requirements for permanent loan modifications, and misrepresented the status of loan modification applications; b) asked borrowers to make payments under "temporary" loan modifications that the defendants never intended to convert to permanent loan modifications as promised; c) erected artificial obstacles to delay or prevent permanent loan modifications; d) misrepresented amounts due and other terms of loans being serviced; and e) charged unwarranted fees.

The lawsuit alleges that EMC and Chase engaged in a loan modification hoax. By inducing consumers to continue making excess or other unjustified payments in pursuit of illusory permanent loan modifications, EMC and Chase allegedly increased loan servicing fees, and avoided the need to foreclose on multiple homes at once, thus conserving resources, and avoiding the liquidation of excess and over-valued real estate inventory. In addition, defendants artificially bolstered their financial statements (including balance sheets and related SEC filings), and minimized reporting of toxic, defaulted, and distressed loans. This "extend and pretend" philosophy was not disclosed to borrowers.

Jean Wilcox
Jean Wilcox's experience was typical of the scheme perpetrated by EMC, the lawsuit alleges. EMC convinced Wilcox to apply for three temporary or "trial" loan modifications, while never approving her for a permanent loan modification as EMC had promised. During this process, the requirements for a permanent modification were continually shifted depending on who at EMC was on the phone, as Wilcox was systematically transferred from person to person. This process took over three years, required the re-submission of loan documents on numerous occasions, cost Wilcox thousands of dollars, injured Wilcox's credit, and wasted innumerable hours of her time and resources. Wilcox and her counsel believe that her experience has been common to many other California homeowners.


Lanza & Smith, a Professional Law Corporation, is based in Irvine, California, and represents clients across Southern California, including Irvine, Newport, Newport Coast, Newport Beach, Costa Mesa, Santa Ana, Los Angeles, Long Beach, Orange, Tustin, Anaheim, Corona Del Mar, Laguna, Aliso Viejo, Huntington Beach, Fountain Valley, Fullerton, Garden Grove, Westminster, Riverside, Dana Point, San Juan Capistrano and Mission Viejo; and Orange County, Los Angeles County, Riverside County and San Bernardino County.