Consumer complaint received 2019-02-28
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: JPMORGAN CHASE & CO. (NY)

I write to you regarding the improper actions of Chase with respect to the FHA servicing of a loss mitigation review, approval and subsequent denial thereof for the above referenced account. 
As described below, Chases misconduct in this matter resulted in unfair and deceptive acts and practices in connection with loan servicing, foreclosure, loss mitigation, violation of homeowners rights and protections and the use of deceptive practices resulting in a waste and abuse of taxpayer funds Each of the allegations regarding Chase contained herein applies to instances in which Chase, either itself or through its affiliates, agents or subsidiaries, engaged in the conduct alleged. 
Based on the facts and behavior of the Chase, we feel that they have intentionally taken steps to avoid honoring the FHA loan modification approval that was issued in XX/XX/2018. Said behavior has harmed the borrower and will ultimately harm the FHA Mutual Mortgage Insurance Fund. Per the federal statute, a loan servicer shall engage in loss mitigation actions for the purpose of providing an alternative to foreclosure .... ' Id. 1715u ( a ). A mortgagee `must consider the comparative effects of their elective servicing actions, and must take those appropriate actions which can reasonably be expected to generate the smallest financial loss to the Department [ of housing and Urban Development ]. ' 24 C.F.R. 203.501. '' The borrower for the above referenced account was in default on his monthly payments and applied for a loan modification. Via letter dated XX/XX/2018 Chase approved the borrower for a loan modification. That approval was received on XX/XX/2018. Attached hereto as Exhibit A is a copy of the approval. The approval included a FedEx label, which indicated that something needed to be returned to Chase. My office reached out to Chase and was told that the signature page of the trial modification was not included, but because the matter was being litigated no further information could be provided and that it was necessary to contact Chases attorney. Thereafter, on XX/XX/2018 my office contacted Chases attorneys office requesting a complete trial modification so that it could be signed and sent back to Chase, at which point Chases attorneys office replied that Trial modification should require no signatures, simply that they make their first payment within the timeframe indicated so we should be all set. ( emphasis added ). See the email communications between my office and Chases attorney attached as Exhibit B. 
Thereafter, the borrower timely made both his first and second trial payments as required. Then, on XX/XX/2018 Plaintiffs attorney forwarded a letter dated XX/XX/2018 to my office which was a trial approval requiring a signature, it appears that the XX/XX/2018 letter had originally been sent to the borrowers prior attorney. Attached hereto as Exhibit C is a copy of the XX/XX/2018 email. Then, on XX/XX/2018 the borrower received a letter, dated XX/XX/2018, stating that the modification had been terminated because the borrower failed to timely return the signed trial plan. Attached hereto as Exhibit D is a copy of that letter. On XX/XX/2018, after communicating with Chases attorney, the borrower returned the signed trial plan, which had only been received five days before, and requested Chase honor the loan modification offer. Then, the borrower attempted to make the XX/XX/2018 trial payment, but that payment was rejected for not being in certified funds, and then when the borrower sent the money in certified funds, it was again rejected by Chase. See returned payment attached hereto as Exhibit E. 
After additional communication the borrower was informed, in XX/XX/2018, that Chase would honor the loan modification provided the borrower made the XXXX, XXXX and XXXX payments in one lump sum. Attached hereto as Exhibit F is a copy of the email directing such payment. However, the borrower was unsure of where to send the payment, he requested wiring instructions or for Chase to take the payment over the telephone, but that could not be done, and therefore the borrower was unable to send the payment until XX/XX/2018 which is when he learned of the correct address. Attached hereto as Exhibit G is a copy of the payment. Chase rejected this payment too. Attached hereto as Exhibit H is a copy of the rejection. 
Thereafter, the borrower was advised by Chases attorney that his best course of action was to apply for another loan modification, which was thereafter denied by Chase. Attached hereto as Exhibit I is a copy of the denial letter. A foreclosure sale has now been scheduled for the borrowers home. Attached hereto as Exhibit J is a copy of the notice of sale. 
The actions of Chase in this action have been totally improper. This is a FHA loan and is therefore insured by HUD, which means that if the loan suffers a loss, HUD will need to pay a claim. Because this is a government insured loan, Chase was required to take those appropriate action which can reasonably be expected to generate the smallest financial loss to the Department pursuant to 12 C.F.R. 203.501. Here, the borrower demonstrated not only an ability to pay the loan, but a willingness to do so as well. Moreover, it is clear that the only cause of the alleged default with respect to the proposed modification was as a result of certain communication breakdowns, and not due to any inability to reluctance to pay. In fact, it should be noted that the borrower tendered each and every payment that came due, which payments were either accepted or made in certified funds, thereby showing that the modification was possible. 
By refusing to honor the loan modification, Chase has created a situation wherein the borrower stands to be harmed, through the loss of his home, HUD stands to be harmed by potentially paying out a claim that it would not need to pay but for Chases refusal to honor the modification, while Chase will suffer no harm as it is fully insured by HUD. This is in clear violation of 12 C.F.R. 203.501 and would appear to be in bad faith, and is against the public policy of New York. 
Therefore, in light of Chase, and its attorneys, repeated malfeasance or nonfeasance, as the case may be, wherein the borrower was told explicitly that no signature was necessary for the trial modification, when Chase did require such a signature, Chases rejection of trial payments despite agreeing to honor the modification, Chases failure to timely provide a mailing address for a three month lump sum trial payment, and then Chases rejection of that payment, after informing the borrower that such payment would be accepted, you should find that Chase has acted improperly and therefore mete out any punishment deemed appropriate for its handling of this matter.