Continuing their extreme sensitivity to this subject, JPMorgan Chase agreed to pay $27 million to settle the class-action lawsuit from members of the military that accused them of violations of the Servicemembers Civil Relief Act. JPMorgan was accused of overcharging on interest rates for active duty military members and attempting to foreclose on them while they served overseas.
Six thousands service members were covered in the suit, and they will split $12 million, which is actually only $2,000 a piece. But in addition, JPMorgan will contribute $15 million to a fund to go toward additional damages. And, JPMorgan already handed out $6 million to those overcharged with higher interest rates. So now we’re approaching $5,000 per military family, and a judge still has to approve the settlement. And advocates for military families are saying that’s still not enough.
“I don’t know if you can measure what’s enough in terms of giving those families back what they’ve gone through,” said Peter Gaytan, executive director of the American Legion. “We hope this is a lesson to Chase and other lenders to put military families first.” […]
John Odom, a retired colonel in the Air Force who worked on the Hurley case, said that he lacked confidence that the bank will institute long-term changes, though he commended the terms of the settlement.
“They realized that the tsunami was headed right for them,” Odom said. “I do not think that to this day the mortgage servicing industry understands the SCRA and all of the protections.”
Keep in mind that this is just JPMorgan. Wells Fargo settled in a similar class-action suit for $10 million. Morgan Stanley reached a settlement with one Army National Guard sergeant who had his home foreclosed on while he served in Iraq.
AND, this is on top of the measures JPMorgan already put in place to make up for this abuse of military families. This include forgiveness of ALL mortgage debt for any member of the military who faced a wrongful foreclosure, a principal reduction program (which I guess are only good if done for the mortgages of members of the military) and a reduced interest rate of 4% for anyone on active duty. And they’re donating 1,000 homes to veterans, as well as committing to hiring 100,000 veterans over the next ten years.
So in the final analysis, not a single military member lost their home, those that were wrongfully evicted got their home back free and clear, and those ripped off got all the money back for their ripoff plus thousands more, and a reduced interest rate, and maybe a job.
There is an ongoing Justice Department investigation into these wrongful military foreclosures, and JPMorgan is implicated in that probe, along with Saxon Mortgage, a division of Morgan Stanley. There are criminal penalties attached to violations of the Servicemembers Civil Relief Act, and legislation from Sheldon Whitehouse (D-RI) would double those fines.
All of this underlines the extreme measures JPMorgan is taking to rectify the situation with wrongful foreclosures of active duty military. And it also underlines the fact that next to nothing is being done with all the wrongful foreclosures on everyone BUT active duty military. The banksters aren’t stupid. They know that the military is one of the few institutions left in this country with a modicum of authority. They can screw over virtually every other customer they have, but when they extend that to active duty service members, they must bend over backwards to make it up to them.
This is a well-executed strategy by JPMorgan and other banks to mollify military personnel, in the hopes that nobody will notice that the same practices employed against them extended to everyone else who has a mortgage with them.