Consumer complaint received 2020-06-19
Company: JPMORGAN CHASE & CO.
State: CA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
In XX/XX/XXXX I filed for a Chapter XXXX Bankruptcy in order to reorganize my financial affairs. At that time Chase Home Finance ( JP Morgan Chase Bank ) filed a secured claim for my home mortgage for the amount {$700000.00}.  Chase also filed an unsecured claim against a credit card account that I had with them for the amount of {$20000.00}. My bankruptcy plan was confirmed in XXXX, XXXX. I immediately paid off the unsecured credit card, at a payout rate of 10 % as per the plan, {$2000.00}. And over the course of the next 2 years I made both contractual and plan payments to Chase on its secured claim, again in accordance with the confirmed bankruptcy plan. These payments were clearly marked as for payment of the mortgage loan in accordance with the confirmed plan ; and each check included the loan account number in two places. During that time however, Chase fraudulently altered some of these checks, crossing out the loan account number ( ending in XXXX ), and writing-in the credit card account number ( ending in XXXX ). On some checks Chase marked 'Rej ' or 'Reject ', but in all cases negotiated the checks. Chase misappropriated these funds and did not give me credit for them at all. The amount of funds misappropriated by Chase was close to {$45000.00}. 

In about XX/XX/XXXX, Chase transferred servicing of my loan to XXXX XXXX. Chase did not inform XXXX of the altered checks and misappropriated funds ; and didn't even inform XXXX that I was making payments in accordance with a confirmed bankruptcy plan. The result was that XXXX believed that I was delinquent on my payments by the amount that was misappropriated. And XXXX refused subsequent payment from me, because the account was so delinquent that they would only accept a full-satisfaction payment. The ensuing dispute over the loan accounting has so far taken almost six years. And only recently I uncovered the fraudulent misappropriations by Chase, and that those misappropriations were the source of the dispute. 

Chase forged, altered and modified my checks in violation of California Penal Code 470 and 471. In particular ( California Penal Code 470 ) : Every person who, with the intent to defraud, falsely makes, alters, forges, or ..., publishes, passes or attempts or offers to pass, as true and genuine, any of the following items, knowing the same to be false, altered, forged, or counterfeited, is guilty of forgery : any check, bond, bank bill, or note, cashiers check, travelers check, money order, post note, draft, ... and ( California Penal Code 471 ) : Every person who, with intent to defraud another, makes, forges, or alters any entry in any book of records, or any instrument purporting to be any record or return specified in Section 470, is guilty of forgery. In addition Chase violated California Commercial Code 3-420. Furthermore, in violating the terms of the agreed-upon confirmed bankruptcy plan, Chase was in breach of contract. By forging the account number on the checks, Chase also violated California Penal Code 476 PC : " every person who makes, passes, utters, or publishes, with intent to defraud any other person, or who, with the like intent, attempts to pass, utter, or publish, or who has in his or her possessionany fictitious or altered bill, note, or check, purporting to be the bill, note, or check, or other instrument in writing for the payment of money or property of any real or fictitious financial institutionis guilty of forgery. 

By propagating their malfiesance to the successor servicer ( XXXX XXXX  ), by failing to disclose the fact that my payments were in accordance with a confirmed bankruptcy plan, and by obscuring those payments, Chase violated RESPA 12 CFR 1024.35 ( b ) -- and also directly caused the successor servicer ( XXXX XXXX  ) to be in violation of the same statute. In particular : Failure to accept a payment that complies with the servicers written requirements. 
Failure to apply an accepted payment to principal, interest, escrow, or other charges as required by the mortgage loan and applicable law. 
Failure to credit a payment to the borrowers account as of the date the servicer received it, as required by 12 CFR 1026.36 ( c ) ( 1 ).

Failure to transfer accurate and timely information relating to servicing to a transferee servicer.

and also 12 CFR 1024.38 ( b ). In particular : Servicers are required to maintain policies and procedures that are reasonably designed to achieve the following objectives ...

4. Facilitating transfer of information during servicing transfers ....

b. Transferee Servicer. The servicers policies and procedures must be reasonably designed to ensure that when it receives a mortgage loan from another servicer, it can ( i ) identify necessary documents or information that may not have been transferred, and ( ii ) obtain such documentation or information from the transferor servicer.

Company response to consumer: Closed with explanation