JP Morgan Chase, one of the nation's largest banks, says it overcharged some 4,000 troops on their mortgages and improperly foreclosed on 14 military families.
The bank admitted the mistake during a lawsuit that was filed by Marine Capt. Jonathan Rowles, who was on active duty when the bank overcharged him and his family by as much as $900 a month on their mortgage.
Active-duty troops get their mortgage interest rates lowered to 6 percent and are protected from foreclosure under the Servicemembers Civil Relief Act. But Chase says it mistakenly had been charging Rowles, who had a resetting adjustable rate mortgage, at rates above 9 percent or 10 percent before later correcting his rate to 6 percent. Collection companies said the family owed $15,000 in uncollected fees.
We are deeply appreciative of those who fight to protect our country and Chase funds a number of programs that provide benefits to military personnel and veterans, and while any customer mistake is regrettable, we feel particularly badly about the mistakes we made here, Chase chief communications officer Kristin Lemkau told NBC News in a statement.
To make amends, Chase will be mailing about $2 million in refunds to families who were overcharged. Most of the families who were improperly foreclosed upon have already gotten their homes back.
Source: No. 2 Bank Overcharged Troops on Mortgages, MSNBC.com (Jan. 17, 2011)