Poland woman sues Chase over foreclosure law

By TERESA DIXON MURRAY

Plain Dealer

CLEVELAND

In one of the first cases of its kind in Ohio, a Youngstown-area woman is suing JPMorgan Chase for purportedly violating a new law aimed at protecting homeowners.

Bethanne Wasko of Poland filed a complaint accusing the nation’s largest bank of violating a provision of the Dodd-Frank law that requires lenders to work in good faith with customers who have applied for a loan modification.

Instead of trying to work with Wasko, Chase “literally did everything the opposite,” said Cleveland attorney Marc Dann, formerly of Liberty, who is representing Wasko. Chase declined to comment.

In this case, Chase filed for foreclosure against Wasko despite the pending loan-modification request, according to the suit.

Dann said Chase’s behavior is typical of banks nationwide that have pushed back against the law known as HAMP, or the Home Affordable Modification Program, created to help consumers who are dealing with subprime or other home loans that they can’t afford.

The case against Chase was filed last week in U.S. District Court in Cleveland.

Wasko’s story began in 2007, when she took out an adjustable-rate mortgage with BNC Mortgage. The loan was serviced by Chase. By 2009, Wasko was having difficulty keeping up with her payments and asked about a loan modification. She “remained current on her loan until representatives of Chase directed her to stop making payments on her loan in order to be considered for a loan modification,” the complaint said.

Wasko has been setting aside money for the payments for five years, but Chase refuses to accept the money, Dann said.

As of now, Chase has dismissed the foreclosure but hasn’t discussed the loan modification with Wasko.

Chase spokesman Jeff Lyttle declined to comment on the case, but said Chase has designated a section of its website — chase.com/mortgage/mortgage-assistance — for homeowners facing financial difficulties.

Under revisions to a law issued last year that took effect in January, a loan servicer cannot file for foreclosure when a modification application has been filed.

If a modification application has been filed, the servicer is required to review the request promptly and notify the borrower about whether the application is complete.

In addition, a bank that has received a loan-modification application is required to consider the borrower for all options.

Dann said the new law should help homeowners because it requires banks to be accountable.

“People are still having a hard time getting loan modifications,” he said.