Lender Settles Suit over Military Families’ Mortgages
- April 25, 2011
J.P. Morgan Chase will pay $27 million to settle a class-action lawsuit claiming the bank overcharged service members for their mortgages.
The Servicemembers Civil Relief Act bars lenders from charging active-duty members of the military more than 6 percent interest on their mortgages, as well as foreclosing on their homes during their service. A Marine Corps captain sued the bank last year, stating it would not lower his interest rate as required under federal law and that it threatened to foreclose when he declined to pay the higher rate.
Chase will give $12 million to an estimated 6,000 service members covered by the suit, and set up a $15 million fund for additional damages, reports the Washington Post. The bank previously said it had awarded $6 million to members of the military who were overcharged. Earlier, Chase officials said they had wrongfully foreclosed on 18 service members.
Federal officials are investigating other banks as well for their handling of service members’ mortgages.