$45 million settlement reached in mortgage fraud suit


JPMorgan Chase has agreed to pay $45 million to settle a lawsuit that accused the bank of hiding illegal fees in military veterans’ home mortgage refinancing transactions and then trying to collect on void government loan guarantees.

The settlement comes in a whistle blower lawsuit filed by two mortgage brokers in Atlanta that ultimately involved eight banks and mortgage companies.  JPMorgan Chase Bank was the first of the institutions to agree to a settlement.

“JPMorgan Chase is but one lender that thought it could get away with charging illegal fees to veterans and hiding these illegal charges,” Columbus attorney Jim Butler said. “We are proud to be part of an effort to return tens of millions of dollars to the government for fraud that would have otherwise gone undetected.”

The litigation is still pending against Wells Fargo Bank, Bank of America, CitiMortgage, Suntrust Mortgage, Washington Mutual Bank, PNC Bank, Countrywide Home Loans, Mortgage Investors Corp., and First Tennessee Bank.

Butler Wooten & Fryhofer of Columbus, Wilbanks & Bridges of Atlanta and Phillips & Cohen of Washington, D.C., handled the lawsuit on behalf of the whistleblowers and the government.

“Although JPMorgan Chase has paid to settle its claims, we are looking forward to moving the case against the other defendant lenders,” said Atlanta attorney Marlan Wilbanks.  “These banks should be held accountable for causing the government to pay millions of dollars on void loan guarantees.”

The announcement of the JPMorgan Chase settlement came one month after the U.S. Justice Department and 49 state attorneys general reached an agreement totaling $25 billion with the country’s five largest mortgage firms to settle allegations of mortgage loan servicing and foreclosure abuses.

Georgia Attorney General Sam Olens said the settlement would bring in $814.7 million to the state.

Of that settlement amount, about $104 million will be paid directly to the state.  Legislators and state officials have indicated that some of that $104 million will likely be spent in other areas of the state budget not related to mortgage fraud.

© 2012 by The Georgia Report


Tags: Jim Butler , JPMorgan Chase , Marlan Wilbanks , military veterans , mortgage fraud , refinancings