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Consumer Protection Lawsuit
Lanza & Smith has 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. This consumer protection action is pending in Orange County Federal Court, filed on behalf of class representatives Jean Wilcox, Michele Hood, and Sharie Green, plus other California residents who applied for loan modifications. EMC is 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.
It is estimated that the class may include thousands of California homeowners who were victims of fraud - while struggling to keep their homes through this recession. The case, however, is limited to California. The Court has not yet decided whether the case will be certified as a class action.
Contact Lanza & Smith | 888-244-3934 (toll free)
Any witness with knowledge of deceptive or unlawful loan servicing practices - whether through EMC or Chase - is encouraged to contact Lanza & Smith by email or by phone toll free at 888-244-3934. This includes anyone with relevant knowledge, including former employees of EMC or Chase.
Mortgage Fraud
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 phony obstacles to delay or prevent permanent loan modifications; d) misrepresented amounts due and other terms of loans being serviced; e) improperly prosecuted unlawful foreclosure actions; and f) 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 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, the 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.