In violation of the Servicemembers Civil Relief Act, JPMorgan Chase has been overcharging about 4,000 military members on their home loans and improperly foreclosed the homes of 14 military families.
“Chase has a very strong history of supporting military and veterans’ organizations, which makes the mistakes we made here particularly painful,” JPMorgan Chase said in a statement. “We apologize for letting the men and women of our military down and are committed to making this right.”
The American Legion wants all financial institutions that handle mortgages for military families to make sure they are complying with the federal law, which limits interest on a home loan at 6% for troops on active duty.
“This is a sad situation, to discover that any bank may be violating a law intended to ease the pressure of financial concerns while people are serving in uniform,” said Jimmie Foster, national commander of the American Legion. “We wonder whether other banks are charging military families more than 6% on their home loans.”
Kristin Lemkau, chief communications officer for JPMorgan Chase, said that $2 million in refunds are being sent to about 4,000 homeowners who were overcharged on their interest rates. She added that 13 of the 14 foreclosed home cases have been resolved between the bank and the military families.
“While we are encouraged that JPMorgan Chase is making restitution to these families they have unjustly overcharged, we also note that these irregularities came to light because of a lawsuit—not through internal review,” Foster said.
Lemkau said there were internal company problems that led to the fraud issue, but the bank believes it has corrected the mistakes.
“There were a number of problems with our systems and we think we have fixed them,” Lemkau said. “We have an ongoing review of this program to ensure we have identified and cured every problem, and are satisfied that they won’t recur.”
Joseph Sharpe, economic director of the American Legion, does not want the bank to make the same mistakes in the future.
“When our troops go overseas, they still have to deal with family issues and those often include house payments,” Sharpe said. “The last thing that soldiers in Iraq or Afghanistan need to worry about is whether they’re getting ripped off on their loan payments.”
