Bayview Man Claims Chase Bank Trashed His Loan Modification Agreement
Categories: Business, Recession Watch
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In March, it looked like his story had a happy ending: Chase approved him for a permanent loan modification that allowed him to keep his house. Davis says he even received a personal phone call from the bank congratulating him on his success. Then, on June 1, Davis says he received a letter from Chase saying his modification was canceled -- because, the bank told him, he himself had written to withdraw his request.
After months of back-and-forth with Chase, Davis thought he had become one of the lucky ones. After his modification was approved he Fed-Exed his final approval documents to Chase in April. He says he had even called the bank to personally confirm the delivery, and was told that all of his documents were in order. He had begun making his new loan payments.
Now, after months of paperwork and payments, Chase was telling him that he had canceled his own hard-won modification.
Every time he called the bank for an explanation, he received a different answer, Davis says. He was told that the Chase had never received his confirmation paperwork, despite the Fed-Ex confirmation slip and the phone call he made to ensure that his forms had arrived safely. He was also told the letter was probably just a computer-generated fluke, and that the issue should clear up in a few days.
Zack Mack-Westrom, Davis' housing counselor at the non-profit San Francisco Housing Development Corporation, called the situation "utterly amazing."
He called Davis "a model borrower," a person who "crossed every t, dotted every i" throughout the loan modification process, and who had proved he could keep up with his new loan payments.
On top of that, Mack-Westrom said, Davis' case had received special attention from a Chase representative after his story aired on the radio.
Now, even though Davis has meticulous documentation of his entire process, Chase is asking him to start again from scratch.
"It's in the poorest of bad faith" on the part of the bank, Mack-Westrom said.
Gary Kishner, a spokesman for J.P. Morgan Chase, said he was looking into Davis' situation.
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In order to secure a loan modification, homeowners have had to struggle through a confusing process, with banks representatives frequently losing paperwork, making mistakes, delaying decisions, giving them contradictory advice, and even denying loans for bogus reasons.
In the past months, JP Morgan Chase in particular has come under scrutiny for denying loans to homeowners for reasons that the Treasury Department had explicitly barred them from using, and for having the highest number of people stuck in "home loan limbo" with trial home loan modifications that stretch on month after month.
Although the Treasury Department has set aside $39.9 billion to help homeowners avoid foreclosure -- including nearly $6 billion to JP Morgan Chase subsidiaries alone -- only $190 million of that has been spent as of May 2010, according to the watchdog organization ProPublica, which has been coordinating media reports on the struggling federal program. That's because only 20 percent of the estimated eligible homeowners have been approved for a permanent loan modification.
Photo | Sercasey
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