JPMorgan Chase Pays $18.3M for Misleading Mortgage Info
JPMorgan Chase & Co. has agreed to pay $18.3 million to settle a lawsuit accusing the lender of misleading homeowners about interest rates on adjustable rate mortgages.
The lawsuit, filed in 2007, alleged that JPMorgan Chase and lending units of Bear Stearns misled consumers by failing to tell them that their loan’s principal would increase if they made the minimum monthly payment.
The class action was filed in 2007, and J.P. Morgan acquired the loans when it took over EMC Mortgage Corp., a lending unit of Bear Stearns in 2008 during the financial meltdown.
The class covers California homeowners with option adjustable rate mortgages between August 2003 to March 2013 which were purchased by EMC.
“I’m happy with the settlement, and I think given the risk to reward, people are going to be pleased,” said attorney Jeffrey Berns, a lawyers representing the homeowners.
The $18.3 million settlement is one of several class actions J.P. Morgan Chase has agreed to settle.
It also agreed to pay $10 million to settle a lawsuit over similar loans it acquired when it took over Washington Mutual and $2 million to settle a smaller number of loans it acquired from Lending 1st.
A separate lawsuit that accuses Bank of America’s Countrywide Home Loans of similar wrongdoing is expected to settle for $100 million that awaits final approval.
As part of the settlement, J.P. Morgan did not admit it did anything illegal.