Owners of Bank Foreclosed Homes Take Action

by Peter Vernon on Foreclosure Crisis

A lawsuit has been filed against J.P. Morgan Chase Bank N.A. by three owners of bank foreclosed homes from Queens. According to the homeowners, the bank illegally denied and delayed their attempts to qualify for the Home Affordable Modification Program.

The program was designed to provide permanent relief to bank owned property foreclosures and other homeowners affected by various forms of foreclosure. The case is one of the first lawsuits related to the program. The New York City homeowners are also suing J.P. Morgan’s subsidiaries, Chase Home Finance and Washington Mutual Bank.

According to the homeowners, the bank violated the rules of the program which require banks to provide qualified homeowners with modifications. Part of the qualification requirements for borrowers or homeowners is completion of trial payments and income verification.

Meanwhile, several lawsuits of the same nature have been filed by homeowners all around the U.S. against a handful of banks as foreclosure properties by state continue to rise. Some of the banks that have been named in similar lawsuits are Wells Fargo and Bank of America.

Two of the owners of the bank foreclosed homes revealed that they were able to make payments under the trial modification that covered a three-month period, but their properties were still foreclosed by the bank. J.P. Morgan allegedly countered that the borrowers’ income does not qualify for loan modification.

Meanwhile, the third homeowner asserted that the bank told him to miss payment deliberately so that he could qualify for a loan modification. After not paying for two months, the third homeowner is now facing the possibility of having his home included in a foreclosure list.

The third homeowner further added that despite being allowed to be part of a trial modification, he was denied qualification to permanent relief because of the value of his property. However, the Queens homeowner stated that the bank did not provide details on the value of his property. One of the rules of the federal program is for banks to provide trial modification to owners as long as the modified loan value is higher than the foreclosure value.

According to real estate observers, a number of bank foreclosed homes owners have been under similar situations but most do not have the means to file lawsuits against banks. So far, J.P. Morgan has refused to comment on the issue.

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