Consumer complaint received 2017-09-06
Company: JPMORGAN CHASE & CO.
State: MA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
My XXXX XXXX mortgage was serviced by Chase from XXXX XXXX through XXXX XXXX I was transferred to XXXX effective XXXX XXXX, XXXX. 

In XXXX, I applied for and was given a XXXX modification, The goal ( never reached ) was to reduce my monthly payments to 31 % of my income. ( to $ XXXX/month ). At the end of XXXX my XXXX payments were $ XXXX/ month ( 40 % of my income ) During the month of XXXX XXXX, I was XXXX month past due on my mortgage payment of {$870.00}. On XXXX XXXX, I began the process of creating an assistance program with the help of a Chase assigned relationship manager ( XXXX XXXX XXXX ). 

A letter dated XXXX XXXX offered me a Forbearance Plan Agreement which will allow you to make reduced monthly payments for a specific period of time XXXX {$840.00} from XXXX XXXX, XXXX to XXXX XXXX, XXXX ). XXXX XXXX explained that I should make the first payment 5 days before the due date of XXXX XXXX, XXXX. 

XXXX XXXX explained that She and I would work on a permanent modification at the end of the forbearance period, as she recognized that my net monthly income of {$2000.00} would not allow for me to pay a lump sum for the missed payment of XXXX and the deferred payments of XXXX XXXX and XXXX XXXX. Also, as of XXXX XXXX XXXX, my regular monthly payment of $ XXXX/month was increased ( due to increased escrow and insurance ) to $ XXXX/month. This new payment is equal to 47 % of my gross monthly income and has the effect of essentially negating any help from my having a XXXX modification. 

I agreed to the forbearance plan with my understanding being that the payment of {$840.00} would be applied to the payment due of {$970.00} for each month starting with XXXX XXXX, XXXX. My understanding was that the shortfall of {$130.00} /month would accrue to a total of {$790.00}. My understanding with XXXX XXXX was that a total of about {$3600.00} ( {$790.00} shotfall plus payment for my missed XXXX XXXX payment and the delayed XXXX XXXX and XXXX XXXX payments ) would be addressed in a permanent modification plan developed at the end of the forbearance period. 

The reality of the effect of this forbearance plan was that I was totally misinformed of the way in which the payments would be applied. They were not a way to reduce monthly payments, but rather a means for Chase to satisfy past due payments. For example, rather than applying the XXXX XXXX, XXXX payment of {$840.00} to the payment due for XXXX, Chase put the payment into a suspension account. On my statement for XXXX, the mortgage payment history does not show any payment for XXXX XXXX. The mortgage statement that I received in the mail from Chase indicated a past due payment of {$970.00} for the month of XXXX and a delinquency status of 88 days as of XXXX XXXX, XXXX. When I made the XXXX payment, it increased the amount in the XXXX XXXX to more than {$870.00} and therefore Chase applied {$870.00} to the missed payment for XXXX XXXX. I was not aware of this process until I was finally given an explanation by XXXX XXXX XXXX from Chase Executive Offices, in response to a qualified written request of XXXX XXXX, XXXX. In effect, for me to have maintained a status of current on my mortgage during the forbearance period, I would have had to pay both the forbearance and the regular payment ( {$840.00} + {$970.00} = $ XXXX/month or over 88 % of my monthly income!!! ) .. 

In retrospect, it is clear to me that Chase was at best, disingenuous and/or incompetent, and at worst fraudulent in offering a forbearance without informing me, either verbally or in writing, that the payments would be based on utilization of a suspension account rather than maintaining my payment status as on time for the months of the forbearance. I would have never agreed to this program had I known it would result in putting me further and further in default each month!!! This was not a process to address my payment difficulty. A simple principal deferral would have reduced my monthly payments by {$160.00}, from {$870.00} to {$700.00} before XXXX XXXX ( 32 % of income ) or from {$970.00} to {$800.00} ( 37 % of income ) with the additional {$99.00} increase in escrow and insurance applied to monthly mortgage payments starting in XXXX XXXX. This forbearance plan effectively puts me in immediate danger of foreclosure. 

Chase was fully aware of my financial situation, as documented for the Hamp modification in XXXX and the income information submitted for the modification/forbearance in XXXX of XXXX. 

On XXXX XXXX, XXXX, after receiving my XXXX XXXX Mortgage Loan Statement, dated XXXX/XXXX/XXXX, indicating that I had not made any payments for XXXX through XXXX XXXX, I contacted my relationship manager ( XXXX XXXX XXXX ) about the confusing information on the statement. 
She could not explain the discrepancies but rather stated that she would guide me through what she referred to as an application to develop a permanent loan modification. I faxed all the required paperwork for this application on XXXX XXXX. 

In addition to putting me into a much worst position than I was before I accepted this misrepresented help from chase.com/Mortgage Assistance, Chase informed me by letter on XXXX XXXX, XXXX that the servicing of my mortgage loan would transfer from JPMorgan Chase Bank to XXXX XXXX Servicing effective XXXX/XXXX/XXXX. I received another letter on the same day from Chase stating that I was being assigned a new dedicated relationship manager, a XXXX XXXX XXXX. On XXXX XXXX XXXX, I spoke with XXXX XXXX to determine the status of my modification ; she was not able to provide any information and rudely stated that it did not matter since my mortgage servicing was being transferred to XXXX. I did receive a call on XXXX XXXX, XXXX from XXXX XXXX XXXX, a Chase employee, who is a member of the Chase customer relationships group. He informed me that my modification application was being evaluated by the underwriters and that I should call back on XXXX XXXX to find out the status of the request. 
On XXXX XXXX I learned that Chase would not complete the evaluation and would transfer the documentation to XXXX. 

Chase implemented a transfer of my mortgage servicing in the middle of a modification, to a company with a terrible reputation. By law, the new servicer is supposed to continue the modification process. In general, there is no guarantee the new servicer will honor the modification agreement status with the previous servicer. In the case of the servicer Chase transferred my account to, my research re XXXX indicates I will have serious problems. Under the rules, the new servicer must also have policies and procedures in place to ensure that it honors existing loan modification agreements. This company ( XXXX ) has a reputation of losing documents and being deceitful and dishonest. 

I find it completely unethical for Chase to, on the one hand enroll me in a modification process that would potentially reduce my XXXX about being able to stay in my home of 45 years for the remaining years of my life. ( I am XXXX yrs old ) and simultaneously, on the other, institute the sale of the servicing of my mortgage with incorrect information about the actual status of my payment history. 

Given the information in the above narrative, am I correct in my conclusion that Chase has violated both legal and ethical norms? 

What options do I have?

Company response to consumer: Closed with explanation