J.P. Morgan Chase & Co. Faces Two Cases Alleging Foreclosure Fraud
J.P. Morgan Chase & Co. is the latest big Wall Street bank to disclose the fact that it faces a number of lawsuits based on allegations of improper underwriting. The bank faces class action lawsuits in California and Illinois for "common law fraud and misrepresentation, as well as violations of state consumer fraud statutes." These suits alleging violations of California’s foreclosure fraud laws come after the bank temporarily stopped foreclosures in September.
California’s foreclosure fraud laws subject an offender to both criminal and civil penalties. Thus far, J.P. Morgan Chase is only looking at civil lawsuits, although that is always subject to change, pending a criminal investigation.
California’s criminal foreclosure fraud laws typically involve private “foreclosure consultants” who promise to help postpone or prevent a homeowner’s pending foreclosure.
California’s civil laws regarding foreclosure fraud are different. This civil action alleges that the bank’s employees were not verifying foreclosure documents that their signatures suggested they had. The persons suing (known as the “plaintiffs”) claim that the bank didn’t present “material facts” (that is, relevant information) about the underlying mortgages that made up the mortgage-backed securities in which the plaintiff’s had invested.
