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Queens homeowners sue Chase to gain relief from foreclosure

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Three Queens homeowners filed a lawsuit against JP Morgan Chase Bank Tuesday for allegedly illegally delaying and denying their applications for foreclosure relief.

The Jamaica, Queens Village and Fresh Meadows residents and attorneys from the Urban Justice Center filed the suit in federal court in Brooklyn that alleges the bank refused to provide them the help guaranteed to them under the federal Home Affordable Modification Program.

The three individuals are suing for an injunction to force Chase to modify their loans, end their foreclosures and award them damages.

Chase did not return a phone call for comment.

“Chase has collected months of on-time payments from these homeowners and surely many like them across the country, with seemingly no intention of giving them real relief through permanent modifications on their loans,” said Carmela Huang, an Urban Justice Center attorney who is representing Queens Village resident Shanaz Begum, Jamaica mother Tamara Williams and Fresh Meadows resident Alex Lam.

Under the Home Affordable Modification Program, banks are supposed to reduce mortgage payments for people facing foreclosure provided the individuals complete three months of trial payments and verify their income, which Huang said her clients did.

Begum, who in 2005 bought the home where she lives with her husband and two sons, fell behind on mortgage payments in September 2008 after losing her job as a manager of a retail business. She made trial payments of $1,576 a month for eight months, but Chase did not offer Begum mortgage relief until July 2009, the same month she was served with a foreclosure summons, her attorney said.

The Urban Justice Center said Chase allegedly claimed the Begums’ income is “inadequate,” despite the family meeting Chase’s demands for documentation. Begum now works as a clerical assistant at the city ´╗┐Department of Transportation on weedays and as a server at a Boston Market on weekends.

“Chase has completely lacked any transparency and has been staggeringly unresponsive — leaving us in the lurch for months,” Begum said. “They have demanded spurious documents and claimed they lost others. Our son is headed to college in the fall. We don’t know how to afford those bills too with the possibility of losing our home still looming.”

Williams, who bought her house in 2005 through a subprime, interest-only loan fraudulently marketed to her by a rental broker, fell behind on her payments when she lost her job in November 2008 and went into foreclosure in March of last year.

Chase, according to the suit, failed to provide a loan modification to Williams, who lives with her two sons, despite three on-time trial payments of $1,274 this winter.

“The Obama administra­tion’s program was supposed to give people like me a lifeline and a chance to save our homes, but if the banks won’t play by the rules, what else are we supposed to do?” Williams said.

The suit charges that Chase instructed Lam to deliberately miss mortgage payments in order to become eligible for a modification. Lam bought his house in 2002 and refinanced in 2005. In 2009, he was told he did not qualify for a modification because he was current on his payments.

On his bank’s advice, Lam skipped payments in February and March 2009 and now faces foreclosure.

“I may lose my home and my credit is damaged because I believed what the bank told me,” said Lam. “I held out for the HAMP modification because the terms are better. But the months I spent waiting for Chase to follow through on their promises mean I may have lost any chance to get help by refinancing somewhere else.”

Reach reporter Anna Gustafson by e-mail at agustafson@cnglocal.com or by phone at 718-260-4574.

Updated 5:48 pm, October 10, 2011
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