Consumer complaint received 2017-11-30
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: JPMORGAN CHASE & CO. (TX)

On Sunday morning XX/XX/XXXX, torrential rain from hurricane Harvey caused XXXX XXXX to overflow inundating my neighborhood in XXXX with over 3 ' of water. I along with my neighbors drug our soggy furnishings to the curb and vacated our homes. I had flood insurance and filed my claim with FEMA. On XX/XX/XXXX, while waiting for my claim to be completed by FEMA, I notified my mortgage company JPMorgan Chase of the extensive damage to my home. I started with the Claims department at XXXX. I was told I would need to wait until I received my FEMA check to open a Claim. I was told my check would be placed in an escrow account and paid back to me in partial reimbursements as rebuilding progressed. I explained that this process would not work for me and for a lot of other XXXX residents who would not have the opportunity to rebuild. The response was, " Of course, you will rebuild your home. Why would n't you rebuild? '' I explained that many XXXX residents would not rebuild because of high ICC [ Increased Cost of Compliance ] costs. I explained my understanding was the City is not issuing a building permit if the home is below the flood plain and is substantially damaged [ more than 50 % ], unless the foundation is raised to 4 ' above the flood plain. I pointed out a number of people do not have the funds to invest an additional {$150000.00} in their resident. I explained I would be demolishing my house in order to sell my lot at a future date and was requesting my FEMA check, whatever it was, be applied to my outstanding mortgage. I was advised that there was no process in the Claims department for clients who were not rebuilding. I was transferred to the Mortgage department who told me they had no process in place for a FEMA check to be used to pay down a mortgage. I was advised that in order to make a partial payment on an existing mortgage, I was required to send a letter requesting approval. When I asked what factors would be considered in this appeal, the Mortgage department said it was a Claims issue and got the Claims department back on the line with us. The Claims department said they did not have any information on pay downs which was a Mortgage issue. I explained to both representatives that I was not the only one of their clients in the same situation in XXXX and they needed a process. I said I would call back when I received my FEMA check. Upon receipt of my FEMA check on XX/XX/XXXX, I called the JPMorgan Chase Claims department and opened a claim. I advised my FEMA check was for {$130000.00} [ 60 % damage ] and I was requesting the check be applied as a pay down to my existing mortgage of {$210000.00} rather than placed in an escrow account for rebuilding. I did not request refinancing. I would continue my monthly 4 % mortgage payments of {$1100.00} on the reduced principle until my lot was sold. I was advised to sign the check and take it to a local branch for deposit in an escrow claims account. I was advised to include a letter requesting the check be used to pay down my mortgage. The local branch would fax the letter to " the corporate office for approval '' and I should hear something in 7-10 days. I asked what factors would be considered in my appeal and if the corporate office was aware to the rebuilding requirements by the City of XXXX. I asked if I would be paid interest on the escrow account. I was told the interest paid would be 1 %. I asked why I should pay 4 % on my mortgage priciple when they had my money. I was told that was the process. I said the process did not work for me or for a number of other Chase clients in XXXX. There have been a number of subsequent completely unsatisfactory contacts with Chase. How will clients who can not afford to rebuild access their money if they do what they are told and deposit their FEMA checks in an escrow rebuilding account? I was told the funds would be held until I paid off the loan in full. What if a client does not have the money to pay off the loan? How will they ever get control of their money? Is this a lack of process due to the lack of knowledge of local requirements? Or is it a scam? What are other mortgage companies doing?