JPMorgan Chase Misleading of Mortgage Applicants Class Action

People who are closing on a home must finalize their mortgages within a narrow space of time. The complaint for this class action alleges that JPMorgan Chase Bank, NA misleads mortgage applicants to think they will be approved for a mortgage, then denies the loan, resulting in out-of-pocket losses.

The plaintiffs in this case are Tim and Kelly Hoevelkamp and daughter Alex, who in January 2022 tried to buy a home for Alex. Sellers accepted their offer on a home in Lake Forest, California on January 12. The price was $850,000 with a 25-day closing date. They applied for a mortgage with Chase.

The complaint alleges that a Chase loan officer confirmed that the loan for the Lake Forest Property could be closed within the 25 days and that the loan and appraisal contingencies could be removed in 12 days.

This agreement, the complaint says, was “confirmed in writing via an email correspondence” and later via a pre-approval letter from Chase dated January 12.

The Hoevelkamps put down $25,500 in earnest money. The first and second appraisals were too low, so the Hoevelkamps requested a third. They also gave Chase documents, including, on January 21, the Homeowners Association (HOA) documents.

Chase assured the Hoevelkamps on various days that the loan would be approved, the complaint alleges, and on or around January 25, told them they could remove the contingencies, except for the appraisal contingency. After another appraisal, the complaint claims, they were told they could remove the appraisal contingency as well, although the closing was delayed.

However, the complaint alleges, “On February 8, 2022, Chase raised for the first time … that there was a concern with the HOA certifications.” The closing did not take place as scheduled on February 16, because, the complaint alleges, Chase said it was waiting for HOA documents.

On February 17, the complaint alleges, Chase indicated it was denying the loan, because of a reduction in the HOA insurance amount. However, it did not state this officially.

The Hoevelkamps attempted to apply for a mortgage with Wells Fargo, but could not proceed without an official denial from Chase. On February 23, the complaint alleges, the seller extended the closing date but applied a penalty.

On February 24, Chase finally declined the loan. The Hoevelkamps eventually received a loan from Wells Fargo, but at a higher interest rate.

The complaint alleges Chase’s repeated assurances that they would get the loan misled the Hoevelkamps and cost them money.

The class for this action is all persons in the US who paid fees or penalties, incurred a higher interest rate, or incurred out-of-pocket expenses relating to Chase’s decision not to approve a residential mortgage loan, after Chase or its employees or agents had told them they were approved or conditionally approved for their loans and that they could remove the contingencies, between April 1, 2018 and April 1, 2022.

Article Type: Lawsuit
Topic: News
Tags: Negligence, Negligent Misrepresentation