|A mortgage fraud lawsuit has been settled between a JPMorgan Chase & Co. mortgage unit and a group of Poconos borrowers. It's a litigation fiasco that originally began in 2001.
On a telephone conference call last month, attorneys for all plaintiffs and defendants -- including Chase Manhattan Mortgage Corp. -- indicated that they had reached a settlement in the case, according to an order signed by federal Judge Christopher C. Connor.
Terms of the settlement weren't indicated in the order.
The case was originally filed on April 16, 2004, in the U.S. District Court for the Middle District of Pennsylvania. A companion case was also filed against homebuilder Gene P. Percudani.
Percudani and his companies -- Chapel Creek Homes, Raintree Homes and Chapel Creek Mortgage Banker -- have all filed bankruptcy. They were accused of selling properties in the Poconos for more than 40 percent of their true value by using juiced appraisals.
Chase stopped doing business with Percudani in December 2000.
Chase previously settled a class action with a group of 200 Poconos borrowers by modifying their mortgage balances -- a hit of between $10 to $20 million dollars the New York-based institution. That case was originally filed in June 2001 and also named Chase Vice President William Spaner -- who was accused of ignoring the mortgage fraud after he learned of it in April 1999.
Chase Still Battling Poconos Homeowners
A settlement between Chase Manhattan Mortgage Corp. and borrowers who say they were duped into buying overpriced homes in the Poconos may be on the rocks.
Inflated Poconos Loans, Appraisals May Cost Chase $10-20 Million
Chase Manhattan Mortgage Corp. is considering reducing the value of more than 200 Poconos-area mortgages after appraisal reviews performed by Lenders Service Inc. (LSI) on about 25 loans indicated the homes were sold at inflated prices, according to the Pocono Record. The "Write Downs," which could reportedly cost Chase between $10 and $20 million, would be on loans originated by Chapel Creek Mortgage Banker, Inc. based in Mount Pocono, Pennsylvania. If enacted, victims would see the balances of their mortgages reduced.
EDDIE LESTER, et al., Plaintiffs v. GENE P. PERCUDANI, et al., Defendant.
CIVIL ACTION NO. 3:01-CV-1182 (U.S. District Court for the Middle District of Pennsylvania)
PABLO ACRE, et al., Plaintiffs v. CHASE MANHATTAN MORTGAGE CORP., et al., Defendants.
CIVIL ACTION NO. 1:04-CV-0832, April 16, 2004 (U.S. District Court for the Middle District of Pennsylvania)