Chase to Pay Out More Than $50 Million in Robosigning Settlement

March 6, 2015 No Comments »
Chase to Pay Out More Than $50 Million in Robosigning Settlement

If you are one of the more than 25,000 homeowners who is/was going through bankruptcy and have/had a mortgage with Chase, you might be owed some compensation.

Earlier this week, the megabank reached a deal with the Department of Justice’s U.S. Trustee Program (USTP) to compensate victims of so-called robosigning allegations.

As a result of the settlement, Chase will be required to pay out more than $50 million to affected homeowners through cash payments, loan forgiveness, and mortgage loan credits.

Chase actually admitted to improperly signing more than 50,000 payment change notices (under penalty of perjury), whereby the person who signed it didn’t actually review it for accuracy.

And in 25,000 cases, the notices were signed in the names of other employees, or even employees who had no longer worked for the bank. If this isn’t the definition of robosigning I don’t know what is.

The bank also acknowledged that it didn’t file timely, accurate notices of mortgage payment changes or timely, accurate escrow statements.

The Department of Justice warned other servicers to take note that the U.S. Trustee Program will continue to police their practices and make them pay if they find similar faults.

What Affected Homeowners Can Expect in Compensation

Those affected by the actions of Chase will be compensated in a variety of different ways.

For about 400 homeowners who received inaccurate payment increase notices, Chase will provide $22.4 million in credits and second lien forgiveness.

For more than 12,000 homeowners whose payment increases or decreases were not filed in a timely manner, Chase will pay $10.8 million through credits or refunds.

Another 18,000 homeowners who did not receive accurate and timely escrow statements will receive $4.8 million in credits for taxes and insurance.

Additionally, more than 8,000 homeowners whose escrow payments may have been applied in an inconsistent manner will be paid approximately $600 per loan.

Lastly, Chase will have to contribute $7.5 million to the American Bankruptcy Institute’s endowment for financial education and provide support for the Credit Abuse Resistance Education Program.

Chase has also agreed to make the changes necessary to ensure these problems don’t reoccur. This includes updating technology, policies, procedures, and internal controls.

For the record, taking part in this settlement doesn’t affect the rights of homeowners to seek relief against Chase in other ways.

If you think you may be one of the 25,000 homeowners covered by this settlement, you may contact Chase at 866-451-2327.

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