More Lawmakers Call for Military Foreclosures Probe

JP Morgan Chase's admission that it wrongly foreclosed on the homes of 14 active-service military families and overcharged thousands more on their mortgages is having repercussions in Congress.

Forty members of the House of Representatives have signed a letter to House Committee on Financial Services Chairman Spencer Bachus (R-AL) calling for a hearing on the subject.

"We made mistakes and we are fixing them," the bank said in a statement last month. "We feel particularly badly about the mistakes we made here."

The bank said it is mailing about $2 million to more than 4,000 military families that were overcharged and said it has already resolved 13 of the 14 foreclosures. But Chase's efforts may not be enough to prevent lawsuits and possible prosecution by state and federal officials.

In the letter to Buchus, the House members say they believe the oversight and investigation of bank foreclosure practices, which began last fall, should continue in the 112th Congress.

'Examination is critical'

"In that spirit, we believe a hearing on the mishandling of mortgages of active-duty military families, including an examination of whether the improper actions of JPMorgan Chase extend to other financial institutions as well, is critical," the lawmakers said in the letter. "Improper actions on the part of banks and financial lenders like JPMorgan Chase, Ally Financial, and Bank of America are something that we have witnessed with increasing frequency with practices such as robo-signing, signing foreclosure forms without even reading them, and even forging documents outright. Unfortunately, it seems that these financial institutions are trying to maintain their bottom line at the expense of American families."

In the Senate, Sen. Jack Reed (D-RI) has asked Attorney General Eric Holder to examine the incidents and Deleware Attorney General Beau Biden asked all banks to review mortgage practices to make sure they comply with the law.

Chase launched an internal review of its practices after Marine Captain Jonathon Rowles -- a pilot flying missions in South Korea -- filed a lawsuit July 6, 2010 in U.S. District Court in South Carolina, charging that military personnel were being overcharged and subjected to aggressive collection practices.

Complaints

Complaints about Chase disregarding its obligation to military men and women are not uncommon.

In May 2009, Melissa of Annville, Pa., told ConsumerAffairs.com that Chase refused to consider any kind of mortgage modification despite a grant from a service organization that would have paid more than half their outstanding balance.

"I am currently deployed and doing my best to support my husband and to ensure a home for my children while thousands of miles away. Not to mention the stress of this ordeal has causing panic attack and jeopardizing my health," Melissa said. "We have a 10" pile of notes as to when and who attempted to contact Chase."

Steven of Portsmouth, Va., wrote in May 2008 that Chase foreclosed on his home while he was on active duty, forcing him into bankruptcy.