Tuesday, July 29, 2014

National Community Organizations Seek Detailed Accounting for JPMorgan Chase Settlement

Homeowner assistance from $13 billion deal yet to materialize substantially, groups seek answers from Justice Department

Washington [July 28, 2014]— A group of community organizations from throughout the country submitted a Freedom of Information Act request this week to the U.S. Department of Justice (DOJ), seeking specific answers to questions related to the November 2013 DOJ settlement agreement with JPMorgan Chase. The request for information comes at a time when the department has recently announced a similar settlement with Citigroup and is reportedly in ongoing negotiations with Bank of America.

The FOIA request asks the DOJ to provide detailed information on how the settlement is actually being implemented; along with the demographics of who is getting relief from the settlement and correspondence between the department and the appointed monitor, Joseph A. Smith, assigned to oversee the implementation of the settlement.

“This settlement was meant to bring relief to those most hurt by the subprime mortgage crisis of 2008,” the request letter states. “The Settlement Agreement called for $4 billion to be delivered in the form of relief to consumers. This relief could come in a variety of forms, including, principal reduction, loan modifications and anti-blight activities, as laid out in Annex 2 to the Settlement Agreement. Unfortunately, many homeowners have yet to see any of this relief.”

“People demanded that the bankers who crashed the economy be held accountable—some of us even went to jail demanding it,” said Kevin Whelan, National Campaign Director of the Home Defenders League. “The bankers bought their way out of jail, but the money hasn’t actually arrived to help the families who need it. The Home Defenders League and community groups across the country are using our rights as citizens to file this official request because people are still suffering across the country. Fulfilling the terms of their settlements is the least the banks can do.”

The FOIA request is the latest in a series of actions that have taken place nationwide in recent weeks, asking the DOJ to provide information and to hold the major banks accountable in past and future multi-billion-dollar settlements.

"Even with the landmark settlement, I have not received any principal reduction on my mortgage,” said Pina Orsillo Belgrano, a Realtor and entrepreneur from Seattle, Washington. “JPMorgan Chase intentionally misled me, and the modifications they offered me never included principal reduction and only reduced my monthly payments by $40." Belgrano says she has struggled for years to get Chase to agree to a sustainable modification. Organizers from Washington Community Action Network and the national organization Home Defenders League forwarded her case along with other examples of the kind of borrower needing relief to officials at the U.S. Department of Housing and Urban Development (HUD) and DOJ, but her loan was instead sold from Chase to a new servicer.

“Eight months after JPMorgan Chase entered into this mortgage settlement amid much fanfare, people in distressed communities in New York City and around the country have seen little relief,” said Josh Zinner, Co-Director of New Economy Project. “This follows the unfortunate pattern of prior mortgage settlements with the biggest banks, where promised relief has failed to reach the hardest hit communities. Regulators must draw the line—the public deserves to know whether Chase is providing principal reduction modifications in the neighborhoods where they are most needed.”

"Homeowners in California's hardest hit communities are still wondering where the promised relief from the Chase settlement, and other settlements, has gone," said Kevin Stein of the California Reinvestment Coalition." Greater bank and servicer transparency is needed to ensure that homeowners in all communities have equal access to loan modifications so that families and neighborhoods can begin to recover from the crisis."
Organizations signing the request letter include the Center for Popular Democracy; Home Defenders League; Action NC; Action Now; Alliance for a Just Society; California Reinvestment Coalition; Consumer Action; Colorado Foreclosure Resistance Coalition; Minnesota Neighborhoods Organizing for Change; National People’s Action; New Economy Project and New Jersey Communities United.

A PDF of the letter is linked here.

The Home Defenders League is a national organization fighting against foreclosures and for a just resolution to the mortgage crisis including mass principal reduction for underwater homeowners.

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