Finally there may be some hope for millions of Americans struggling to cope with the effects of foreclosure that has hurt the country over the past several years.
A recent ruling by the United States District Court for the Central District of California against JP Morgan paves the way for anyone living in California who was subjected to the predatory lending practices of major banks – a significant cause of the economic meltdown of 2008 – to finally get relief.
The District Court upheld an injunction against JP Morgan Chase, instructing them to stop attempts to collect payment on a foreclosed Home Equity Line of Credit (HELOC), which was deemed to have been made using the predatory lending tactics of Washington Mutual, a bank whose assets Chase acquired after the US government closed down that bank. Furthermore, Chase has been ordered to stop providing derogatory information to all credit rating agencies as a result of this HELOC.
California State law bars companies from attempting to collect payment on foreclosed Home Equity Lines of Credit if the assets are acquired after the property has already been foreclosed upon. The California Consumer Legal Remedies Act was put in place specifically to protect consumers from the kinds of predatory loan practices employed by lending institutions during the Great Depression era.
Kenneth Eade, whose law firm represents the plaintiff in the case, says that it’s “”in the public interest that JP Morgan Chase should not be permitted to report outstanding deficiency balances that are barred from collection by state statutes that were enacted to provide those same consumers with relief. Such statutes were enacted to balance the equities between the consumer and the banks; to protect the consumer and give him power against entities such as the defendant, one of the largest banks on the world.”
Eade also cited the federal Fair Credit Reporting Act as part of the injunction against JP Morgan Chase. Said Eade, “the importance of fairness to the consumer is a vital element of the legislative history of the Fair Credit Reporting Act. Cases where creditors are able to exercise non judicial remedies to recover their collateral to loans and then seek deficiencies, such as in this case, it is essential that consumers such as the Plaintiff have a remedy for creditors who break the law.”
The success of this injunction is a potentially devastating blow to the major banks, who now have to prepare for a legion of lawsuits from anyone in California who has been a victim of the mortgage debacle including foreclosure brought about by the unscrupulous lending practices of the major banks. Such a preliminary injunction is a serious measure, only issued by a Court if it believes the case has a likelihood of success if taken forward. Chase has been ordered to stop providing negative ratings information about the HELOC in this case, pending its outcome.
For more information, please visit http://kennetheade.net or contact the Law Office of Kenneth Eade at (323) 782 8802.