Chase Home Mortgage Problems

Chase Home Mortgage is a full-service mortgage lender operating in nearly all fifty states. The organization is an arm of the larger parent company, Chase Manhattan Bank, which has branches in sixty countries. Like many mortgage institutions, Chase Home Mortgage has had complaints filed against it--some of which have made it to the federal level.

Individual Operations

Chase Home Mortgage branches operate independently of one another. This means that, while there is an overseeing body, each branch must conduct the day-to-day lending business on its own. It also means that some problems attributed to certain Chase lending officers and managers may not exist at other branches in other states.

Consumer Lawsuits

In August 2009, Chase Home Mortgage was hit with a number of lawsuits. Most of these lawsuits stemmed from Chase arbitrarily suspending HELOCs (Home Equity Line of Credit) on customers. While these suspensions were most likely related to the credit crisis in 2008, some customers in good standing with no previous credit problems were affected.

FCRA, Nelson v. Chase Manhattan

The Fair Credit Reporting Act (FCRA) is designed to protect consumers from unfair and unethical marks on their credit reports. The three major credit reporting agencies (CRAs)--Trans Union, Experian, and Equifax--must abide by the guidelines set forth in the Act. However, it is normally the lenders who either wittingly or unwittingly report inaccurately on consumers' accounts.

In this case, filed March 2000, the plaintiff, Toby Nelson, alleged that Chase Mortgage unfairly reported a bankruptcy on his credit report, resulting in his inability to obtain more credit. The plaintiff's wife, who was a cosigner on the loan, filed for bankruptcy. She only discharged individual debts in her bankruptcy, not the mortgage, and but the plaintiff was left with a bankruptcy on his credit report as well. The court defended Chase's actions and gave no legitimacy to the defendant's claims. However, in 2002, the Appellate Court in the Ninth Circuit overturned this decision and sided with the defendant.

BBB Rating

In 2009, The Better Business Bureau, a non-profit rating agency that reviews all types of American businesses, assigned a rating of "F" for Chase Home Mortgage. This is the lowest rating possible on their scale from A+ to F. According to the BBB, consumers and agencies have filed over 700 complaints against the company, 61 of which were never handled.

Contractual Violations

The majority of the complaints against Chase Home Mortgage are contractual in nature. This means that the company failed to honor its end of a loan agreement. These complaints usually stem from the company changing a part of the loan--like the interest rate, payment, or term--to unfavorably affect the borrower.

References

• Nelson v. Chase Manhattan
• BBB: Chase Home Mortgage
• BBB: Complaints

Resources

• HELOC Suspension
• Ninth Circuit Appellate Decision