JPMorgan Chase settles military mortgage dispute for about $54 million
JPMorgan Chase (JPM) agreed to pay about $54 million to settle lawsuits that accused the banking giant's Chase Home Finance unit of violating the Servicemembers Civil Relief Act of 2003 by failing to promptly lower interest rates when homeowners entered active duty. The plaintiffs also alleged the lender violated debt-collection practices. In a statement, JPMorgan Chase said it would pay $12 million to members of the class-action suit. In addition, the bank is offering its military customers $27 million in benefits and will set aside $15 million for additional damages that could be implemented later. The SCRA protects military personnel on active duty by affording them special protections when it comes to home foreclosures and mortgage collections. One case – Rowles v. Chase – involved a reserve officer in Colorado. The plaintiff, Capt. Jonathon Rowles, accused the lender of violating the act by failing to promptly implement a 6% interest cap on his mortgage as stipulated under the federal statute. ??Rowles accused the lender of failing to keep the 6% rate consistent throughout his deployment by constantly requiring him to verify his active duty status. Furthermore, the officer on behalf of a similarly situated class of military members accused the lender of employing unlawful collection practices in relation to the loan. "We are sorry and regret the mistakes our firm made on mortgages for members of the military, and we’d like to thank Capt. and Mrs. Rowles for helping us address them," said Frank Bisignano, chief administrative officer of JPMorgan Chase who was appointed head of Chase Home Lending in February. JPMorgan said Thursday it has implemented a new series of benefits for military personnel. As part of the package, Chase will lower mortgage interest rates to 4% on loans belonging to service members on active duty. That cap will extend for another year after service. In addition, there is a military loan modification program and several homeownership assistance opportunities, including the stipulation Chase will not foreclose on military personnel who are deployed. Write to Kerri Panchuk.