Ellis v JPMChase- 12- 03987

National Debt

national debt

Regulators

Mortgage Related

Government Sponsored

Announcement Date: October 7, 2016

jpmorgan

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

DIANA ELLIS, JAMES SCHILLINGER, and
RONALD LAZAR, individually and on behalf
of other members of the general public
similarly situated,
Plaintiffs,

vs.

J.P. MORGAN CHASE & CO., J.P.
MORGAN CHASE BANK, N.A., and
CHASE HOME FINANCE LLC,
Defendants

Named Plaintiffs Diana Ellis, James Schillinger, and Ronald Lazar filed a Class Action
Complaint against Defendants J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and
Chase Home Finance LLC (collectively, “Chase” or “Defendants”). (Dkt. No. 1.) Plaintiffs allege
Chase engaged in fraudulent practices by charging marked-up or unnecessary fees in connection
with Defendants’ home mortgage loan servicing businesses.

[…]

Plaintiffs also allege that Defendants used a sophisticated home loan management program
provided by Fidelity National Information System, Inc. called Mortgage Servicing Package (the
“Program”). (Compl. ¶¶ 36.) The Program “automatically implement[ed] decisions about how to
manage borrowers’ accounts based on internal software logic” and imposed the default-related fees when a loan was past due. (Id. ¶ 37.) The parameters and guidelines for the Program were inputted by Defendants and “designed by the executives” at J.P. Morgan Chase & Company and J.P.
Morgan Chase Bank, N.A. (Id. ¶¶ 35–37.) “Chase Home Finance LLC and J.P. Morgan Chase
Bank, N.A. assess[ed] fees for default-related services on borrowers accounts through these
systems.” (Id. ¶ 37.) In addition, Plaintiffs allege that Defendants use a “Bankruptcy Work
Station” platform “infused with computer logic to manage a loans [sic] during pending bankruptcy” and a program called “FORTRACS” which “automate[d] default management processing,
decision making and documentation of a loan.” (Id. ¶ 38.)

The Complaint alleges “Chase” serviced the mortgages. (Compl. ¶¶ 61, 64 & 67.) As to
Plaintiff Diana Ellis, Chase assessed $154.24 for “Miscellaneous Fees” on a July 1, 2011 Mortgage Loan Statement. (Id. ¶ 62.) Plaintiff Ellis alleges this fee was marked-up and unnecessary, and that “over the history of her loan, her account was assessed numerous other unlawful and unnecessary fees for default-related services.” (Id.) Plaintiff Ellis alleges on information and belief that she “paid some or all of the unlawful fees assessed on her account.” (Id.) As to Plaintiff James Schillinger, Chase continually assessed fees for default-related services, including property inspections, on his account. (Id. ¶ 65.) He alleges such fees were charged on dates including October 18, 2011, October 28, 2011, and February 18, 2012. Plaintiff Schillinger alleges that he “paid some or all of the unlawful fees assessed on his account.” (Id.) As to Plaintiff Ronald Lazar, Chase continually assessed fees, including fees for property inspections, on his account in 2010 and 2011. (Id. ¶ 68.) The fees were identified as “Miscellaneous Fees.” (Id.) In addition, Chase sent Plaintiff Lazar an “Acceleration Warning” dated June 2, 2011, in which it demanded he pay $86.80 in “Other Fees” and $28.00 in “Advances.” The Acceleration Warning letter stated that “Other Fees and Advances include those amounts allowed by your Note and Security Instrument.” (Id.)

Plaintiff Lazar alleges that he “paid some or all of the unlawful fees assessed on his account. (Id. ¶ 69.) As to each Plaintiff, they allege they cannot provide details of each and every fee assessed because Defendants maintain the complete accounting. (Id. ¶¶ 62, 65 & 69.)
Plaintiffs allege that “Defendants are under a continuous duty to disclose to [them and class
members] the true character, quality, and nature of the fees they assess on borrowers’ accounts.”
(Compl. ¶ 71.) Chase “actively concealed the true character . . . of the[] assessment of marked-up
fees against borrowers’ accounts” and borrowers “reasonably relied upon Defendants’ knowing,
affirmative, and active concealment.” (Id.) In addition, Chase “falsely represent[ed] on statements provided to borrowers that ‘Other Fees’ and ‘Advances,’ which are charges for BPOs and property inspections, include ‘amounts allowed by [borrowers’] Note and Security Instrument.’” (Id. ¶ 53(first alteration supplied).)

ellis-v-jpmc-12-03897-doc-1-complaint-July-24-2012

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