HUD OIG Report | JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review

“We reviewed 36 affidavits for foreclosures in judicial States to determine whether the amounts of the borrowers’ indebtedness were supported. Chase was unable to provide documentation for the amounts of borrowers’ indebtedness listed on the affidavits for all except four. When we reviewed the four affidavits in detail with Chase management, three were inaccurate.”


JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review

March 12, 2012


FOR: Charles S. Coulter, Deputy Assistant Secretary for Single Family Housing, HU

FROM: Kelly Anderson, Regional Inspector General for Audit, 5AGA

SUBJECT: JPMorgan Chase Bank, N.A.

Foreclosure and Claims Process Review
Columbus, OH


As part of the Office of Inspector General’s (OIG) nationwide effort to review the foreclosure practices of the five largest Federal Housing Administration (FHA) servicers (Bank of America, Wells Fargo Bank, CitiMortgage, Ally Financial, Incorporated, and JPMorgan Chase Bank), we reviewed JPMorgan Chase Bank’s (Chase) foreclosure and claims processes. In addition to this memorandum, OIG issued separate memorandums for each of the other four reviews.1 We performed these reviews due to reported allegations made in the fall of 2010 that national mortgage servicing lenders were engaged in widespread questionable foreclosure practices involving the use of foreclosure “mills” and a practice known as “robosigning”2 of sworn documents in thousands of foreclosures throughout the United States. We initially focused our efforts on examining the foreclosure practices of servicers in the judicial States and jurisdictions in which they do business.3

Chase is a supervised FHA direct endorsement lender that can originate, sponsor, and service FHA-insured loans. Chase’s foreclosure operations are conducted by its servicing branch, Chase Home Finance, LLC (Chase Home), which is located in Westerville, OH. As of October 1, 2010, Chase Home serviced more than 580,000 FHA-insured loans. In addition, Chase acquired EMC Mortgage Corporation and Washington Mutual Bank in March and September 2008, respectively, and obtained their loan servicing portfolios.

During Federal fiscal years 2009 and 2010, Chase submitted 16,223 FHA insurance claims totaling more than $2 billion.4 It also submitted 385 FHA insurance claims totaling $46 million using EMC’s or Washington Mutual FHA servicing identification numbers during the review period;5 thus, approximately 2.3 percent of its claims were for loans previously serviced by EMC or Washington Mutual. In September 2010, Chase stated that it had temporarily halted judicial foreclosures while it reviewed its foreclosure process. Because we identified potential False Claims Act6 violations, we provided the U.S. Department of Justice (DOJ) with our analyses and preliminary conclusions as to whether Chase engaged in the reported foreclosure practices. DOJ used our review and analysis in negotiating a settlement agreement with Chase. On February 9, 2012, DOJ and 49 State attorneys general announced their proposed settlement of $25 billion with Chase and the four other mortgage servicers for their reported violations of foreclosure requirements. As part of the proposed settlement agreement, each of the five servicers will pay a portion of its settlement to the United States and also must undertake certain consumer relief activities. The proposed settlement agreement described tentative credits that each mortgage servicer would receive for modifying loans, including principal reductions and refinancing, and established a monitoring committee7 and a monitor to ensure compliance with agreed-upon servicing standards and consumer relief provisions. Once the final settlement agreement has been approved by the courts, OIG will issue a separate summary report detailing each of the five servicers’ allocated share of payment due as a result of the settlement agreement.

Our objective was to determine whether Chase complied with applicable foreclosure procedures when processing foreclosures on FHA-insured loans.

Full report below…



JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review

3 Responses to “HUD OIG Report | JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review”
  1. TIFFANY COATS says:

    I had Washington Mutual as my mortgager and in 2009 I was foreclosed on. I had went through Katrina in 2005 and was still trying get to fix my home, this was my child hood home I had bought from grandmother. The foreclosure was deemed illegal and I received 6000.00. This of course was after they took my home from me. The kicker here is that Washington Mutual still had 29,000.00 of my insurance money when they foreclosed. The money was located and now in the hands of Chase Bank. I have been trying to get that money returned to me for 3 years now. Does anyone have a number to someone high up in Chase that would maybe be decent and helpful? I was once told by some one at chase that the 29,000.00 was used to pay for foreclosure…well that’s to bad for them because I never should have been foreclosed on and they can not use insurance claim money how they see fit. This amount of money is life changing. They took my home away from me and now have stolen money from me. How can they get away with this and sleep at night?

  2. Imanda Waldon says:

    I cant wait to see the HUD OIG Report / CitiMortgage. These types of practices and abuses has to stop. It has cost homeowners huge monetary damage, mental stress, loss of jobs, retirements / investments, loss of credit rating, etc. CitiMortgage blacked our payments out in Nov and Dec 2009 and put our home in default in January 2010. We have showed proof of our payments made due to they come automatically out of our checking account. We have been sucked into a black money hole (the system), and doesnt seem like we will ever get out. It just keeps costing all we make. Now it is 2012 and we are still fighting FRAUDCLOSURE. Even our attorney has said numerous times to folks in the system…….Its NOT their fault they are here; how can you justify doubling their mortgage amount. And I am very glad this report implies that the mortgage industry request reimbursement for defaults. They charge the homeowner and government? Folks, there are a lot of rotten eggs getting ready to be squashed. Fight the Good Fight! Your Home is Your Castle; Defend IT!

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