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Wednesday
Feb092011

JPMorgan Apologizes for Overcharging and Foreclosing on Soldiers

Photo Courtesy - Chris Hondros/Getty Images(WASHINGTON) -- Stephanie Mudick, the head of Consumer Practices at JPMorgan Chase & Co., will appear before the House Veterans' Affairs Committee Wednesday to testify that the company illegally overcharged 4,500 soldiers and foreclosed on 18 of them.

The giant financial institution failed to comply with the Servicemembers Civil Relief Act, which provides active duty soldiers, who purchased a home prior to the start of their active duty, a six percent cap on their mortgage interest rate and any other fees while they are on active duty and for a year following their active duty.

Mudick will start her testimony with an apology, according to a written version, saying, "I want to express to the men and women serving our country and to the members of this committee Chase's deepest regret over the mistake we made in applying those protections."

During the testimony, she is expected to turn to Capt. Jonathan Rowles and his wife Julia, who will be at the hearing with their attorney, and apologize to them.

"We clearly made mistakes in how we serviced their mortgage and how we dealt with them in trying to resolve those mistakes.  The customer service we provided to Capt. Rowles and his wife was unacceptable and the fact that this was a servicemember makes our mistakes all the more inexcusable."

Rowles did everything right.  He sent Chase a copy of his active duty orders and sent them again when Chase couldn't find the first set.  Rowles and his wife didn't miss a mortgage payment, but according to their attorney, Richard Harpootlian, Chase failed to credit them for the payments and then launched a determined collection agency campaigns.  The calls came three times a day, some after midnight and at 4:00 a.m.

"In telephone conversations, voicemails and correspondence during this time Chase representatives repeatedly threatened to report Rowles to credit bureaus and to initiate foreclosure proceedings on their house," according to Harpootlian.

All of this was happening while Capt. Rowles was serving out of the country.  His wife, Julia, was home with a young child and pregnant with another one.

Mudick says Chase is in the process of making things "whole again."  They are returning $2.4 million to servicemembers and their families and they have taken care of 12 of the 18 foreclosures.

Copyright 2011 ABC News Radio







ABC News Radio