How Chase Ruined Lives of People Who Paid Off Their Mortgages - NakedCapitalism [View All]

[WillyT]

How Chase Ruined Lives of People Who Paid Off Their Mortgages
Yves Smith - NakedCapitalism
FRIDAY, AUGUST 26, 2011

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Matt Taibbi, in giving a well deserved thrashing to the banking industry’s Tokyo Rose, aka New York Fed director Kathryn Wylde, said:

Stealing is pretty much the worst thing that a bank can do — and these banks just finished the longest and most orgiastic campaign of stealing in the history of money.

Once you read the allegations in the cases included in this post, I strongly suspect you will agree that the “ruining lives” in the headline is not an exaggeration. And as important, these two cases, with very similar fact sets, also suggest that these abuses are not mere “mistakes”. These are clearly well established practices that Chase can’t be bothered to clean up, since cleaning them up costs money and letting them continue is more profitable.

Both cases took place in Alabama. In both cases, the borrowers had made every mortgage payment on time. One was a couple with three children, the Barnetts. The second is a widow, Besty Barlow, but her husband was still alive when this ugly saga started.

In both cases, the house burned down, The borrowers both had homeowners’ insurance. In the case of the Barnetts, they promptly notified Chase, their servicer, and made one mortgage payment post the fire. Both the homeowners and the insurer, State Farm, called Chase to get a ten day payoff amount. They were told not to make the next payment, since it would be included in the payoff amount. State Farm sent as check as instructed, asked that the mortgage be paid off, and Chase cashed the check.

But Chase did not pay off the mortgage. It put the funds in a suspense account The Barnetts found out the mortgage had not been paid off on their own, and called Chase to get the matter corrected. Chase then proceeded to harass the Barnetts for payment, calling at home and at work. Chase then ‘fessed up that they had the money, and asked the wife, April, to send a fax instructing them to make the payoff. They didn’t, called to pressure her again, and claimed they never got the fax. April repeated the process as instructed a second time (to a different number).

Chase continued to call demanding payment and then sent a letter stating that Fannie had refused the payoff due to “past due” amounts. Chase wanted an additional $8000, which consisted of fees that were not warranted and were due solely to the failure to pay off the mortgage with the money they had.

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More: http://www.nakedcapitalism.com/2011/08/how-chase-ruined-lives-of-people-who-paid-off-their-mortgages.html

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