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News Journal: AG Biden asks lenders to review practices

AG Biden asks lenders to review practices

Banks must comply with military act

By Eric Ruth, The News Journal • January 20, 2011

Attorney General Beau Biden called on lenders to review their mortgage and foreclosure procedures Wednesday after JPMorgan Chase & Co. acknowledged that military families were overcharged on loans or wrongfully lost their homes.

In a letter sent Wednesday, Biden asked Chase, Bank of America, Citi, GMAC, Litton Loans, PNC and Wells Fargo to ensure they are complying with the Servicemembers Civil Relief Act, which seeks to provide protections against foreclosure and discounts on mortgage rates for military families.

JPMorgan has said its mortgage unit is refunding $2 million in excessive interest and fees charged to 4,000 active-duty personnel and is reimbursing or reversing foreclosures for 14 other families who wrongfully lost homes while on active duty.

Marine Capt. Jonathon Rowles, a pilot flying missions in South Korea, sued JPMorgan July 6 in U.S. District Court in South Carolina, claiming military personnel were overcharged and subjected to aggressive collection practices. Rowles said the bank did not adjust the interest rate on a $255,000 loan for his Colorado home even after he repeatedly provided proof of service.

The bank “began to pursue aggressive collection methods,” calling his mother, his workplace and his home up to three times a day, after midnight and at 4 a.m., he said.

Biden, who is a member of the Delaware Air National Guard and served a year in Iraq, pressured lenders last year to review foreclosure procedures after sloppy handling of cases was revealed.

In this letter, he asks the banks to inform him of the results of their evaluation by March 31 and provide restitution to any military families who were overcharged or improperly foreclosed upon.

“Servicemen and women in harm’s way need to focus on their mission and cannot afford to be distracted by banks not abiding by the law,” Biden said in a statement. “I have seen firsthand the stress and difficulty our warriors face in managing their responsibilities on the home front while deployed overseas.”