Chase accused of short sale fraud

According to an article from CNBC, several big banks, including Chase, have been accused of short sale fraud as second lien holders.

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But here’s what’s not legal and what’s apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say “on the side,” I mean in cash, off the HUD settlement statements, so the first lien holder doesn’t see it.

“They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale,” says Brandt. “So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal.”

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Brandt told me he’s heard from at least 200 agents that they’ve had these requests made by representatives of Citi Mortgage, JP Morgan Chase, Bank of America and other large banks.

Chase mistake nearly kills yet another business

We recently reported on mistake Chase made that killed a Seattle area soap company.  Looks like they’ve done it again in the Seattle area, this time to the wife of an area columnist.   By freezing the credit line his wife used to run a small housing development business, something that broke their own contract, they cost the business two months of progress and thousands of dollars.

I was a longtime Washington Mutual customer (back when it was a “friend of the family”). When Chase took over, inertia, or maybe it was laziness, kept me hanging around.

Bad move. In the spring, Chase, for no good reason, plunged my family into a financial crisis.

Without notice, Chase froze a line of credit my wife was using to run her small housing-development business. She had a project in mid-construction. One day she had money to pay the construction crew. The next day it was gone.

She had to halt construction, lay off workers and spend two months and thousands of dollars appealing to a disinterested corporate Borg. (The loan eventually was reinstated when it was made clear that Chase, by its own contract, had no grounds to freeze it.)

Chase’s 22 cent solution

We pointed this out in a post yesterday, but I thought it was so ridiculous it was worth mentioning again.

An article in the Arizona Sun newspaper discussing people’s difficulty getting loan modifications with Chase gave as an example one customer who was able to get a loan modification successfully.  His total reduction in monthly payment after months of working hard to get a modification?  A whopping 22 cents.

More Chase loan modification badness in the news

Other than on sites specifically dedicated to fighting abusive banks, like ours, or peoples personal blogs, there haven’t been too many stories about the trials and tribulations of loan modifications in the mainstream press.  So it is nice to see a paper like the Arizona Daily Sun print a story about an Arizona woman and her struggles for the last 13 months trying to get a loan modification and stave off foreclosure.

And wouldn’t you know it, her bank just happens to be Chase.

It is a very typical Chase loan modification story with hours spent on the phone, repeatedly lost paperwork, Chase employees not returning her calls, and never speaking to the same person twice.

The article talks about one Chase customer that was able to get a loan modification, for a whopping 22 cents per month reduction in his payment.

Beware Chase phishing emails

As a large bank Chase is bound to be the target of phishing emails, and they do in fact proliferate, for example. this one.  If you are a Chase customer, educate yourself on the latest Chase scam emails going around here and enter “chase” in the apparent sender field.

A general rule of thumb is to NEVER click on a link directly from an email that asks you for any personal information.  Always type in URL’s directly in the browser yourself.

Sure, a link to a YouTube video your friend sends you is Ok, but if it appears to be YouTube asking you for your credentials, then be suspect.

This is why you should challenge a Chase foreclosure

Another useful tidbit from a great Chase-related blog post.

Quite often, when a big bank like Chase (and it seems especially Chase) forecloses on someone, chances are they have not dotted all ‘i’s and crossed all the ‘t’s.  In fact, there is a good chance they might not actually be able to prove that they have the right to foreclose upon you, and you could quite possibly get your foreclosure dismissed, and perhaps even get your loan forgiven.  Take for instance this deposition of Beth Ann Cottrell, Operations Manager of Chase Home Finance LLC:

Q.  So if you did not review any books or records or electronic records before signing this affidavit of payments default, how is it that you had personal knowledge of all of the matters stated in this sworn document?

A.  Well, it is pretty simple, I have personal knowledge that my staff has personal knowledge of what is in the affidavit on personal knowledge.  That is how our process works.

Q.  So, when signing an affidavit, you stated you have personal knowledge of the matters contained therein of Chase’s business records yet you never looked at the data bases or anything else that would contain those records; is that correct?

A.  That is correct.  I rely on my staff to do that part.

Q.  And can you tell me in a given week how many of these affidavits you might sing?

A.  Amongst all the management on my team we sign about 18,000 a month.

Q.  And how many folks are on what you call the management?

A.  Let’s see, eight.

Chase advertising

Driving home today, I saw something that struck me as funny.  Right in front of a Chase Bank branch was a bus stop.  As many bus stops do, this one had a large advertising wall on one side of it.  The particular ad happened to be for, you guessed it, Chase Bank.  Now, it seems to me that Chase could put the exact same advertisement in their window just a few feet away, and save themselves for having to pay for a bus stop ad.

Dear Chase, you *did* receive our last payment!

Have you just persevered through 12 months of trying to get a loan modification or short sale or ANYTHING at all to happen with Chase and still have nothing to show for it?  I found this cute little story from this blog, which make a pretty good argument for strategically defaulting on your mortgage, if the circumstances are right.

Well, I know a homeowner who lives in Scottsdale, Arizona… lovely couple… wouldn’t want to embarrass them by using their real names, so I’ll just refer to them as the Campbell’s.

So, just the other evening Mr. Campbell calls me to say hello, and to tell me that he and his wife decided to strategically default on their mortgage.  Have you heard about this… this strategic default thing that’s become so hip this past year?

It’s when a homeowner who could probably pay the mortgage payment, decides that watching any further incompetence on the part of the government and the banks, along with more home equity, is just more than he or she can bear.  They called you guys at Chase about a hundred times to talk to you about modifying their loan, but you know how you guys are, so nothing went anywhere.

Then one day someone sent Mr. Campbell a link to an article on my blog, and I happened to be going on about the topic of strategic default.  So… funny story… they had been thinking about strategically defaulting anyway and wouldn’t you know it… after reading my column, they decided to go ahead and commence defaulting strategically.

So, after about 30 years as a homeowner, and making plenty of money to handle the mortgage payment, he and his wife stop making their mortgage payment… they toast the decision with champagne.

You see, they owe $865,000 on their home, which was just appraised at $310,000, and interestingly enough, also from reading my column, they came to understand the fact that they hadn’t done anything to cause this situation, nothing at all.  It was the banks that caused this mess, and now they were expecting homeowners like he and his wife, to pick up the tab.  So, they finally said… no, no thank you.

Luckily, she’s not on the loan, so she already went out and bought their new place, right across the street from the old one, as it turns out, and they figure they’ve got at least a year to move, since they plan to do everything possible to delay you guys from foreclosing.  They’re my heroes…

Okay, so here’s the message I promised I’d pass on to as many JPMorgan Chase people as possible… so, Mr. Campbell calls me one evening, and tells me he’s sorry to bother… knows I’m busy… I tell him it’s no problem and ask how he’s been holding up…

He says just fine, and he sounds truly happy… strategic defaulters are always happy, in fact they’re the only happy people that ever call me… everyone else is about to pop cyanide pills, or pop a cap in Jamie Dimon’s ass… one or the other… okay, sorry… I’m getting to my message…

He tells me, “Martin, we just wanted to tell you that we stopped making our payments, and couldn’t be happier.  Like a giant burden has been lifted.”

I said, “Glad to hear it, you sound great!”

And he said, “I just wanted to call you because Chase called me this evening, and I wanted to know if you could pass a message along to them on your blog.”

I said, “Sure thing, what would you like me to tell them?”

He said, “Well, like I was saying, we stopped making our payments as of April…”

“Right…” I said.

“So, Chase called me this evening after dinner.”

“Yes…” I replied.

He went on… “The woman said: Mr. Campbell, we haven’t received your last payment.  So, I said… OH YES YOU HAVE!”