JPMorgan must face lawsuit challenging mortgage fees

Fri Jun 14, 2013 3:52pm EDT
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By Jonathan Stempel

(Reuters) - JPMorgan Chase & Co (JPM.N: Quote) must face a lawsuit accusing the largest U.S. bank of illegally imposing marked-up or unnecessary fees on delinquent mortgage borrowers, a federal judge ruled.

District Judge Yvonne Gonzalez Rogers in Oakland, California on Thursday rejected the bank's attempt to dismiss fraud and unjust enrichment claims by the plaintiff borrowers, who hope to represent classes of borrowers nationwide.

Rogers also dismissed racketeering claims against JPMorgan, but said the plaintiffs can try again to pursue them.

Mortgage servicers typically collect borrowers' payments, pay taxes and insurance, arrange loan modifications and pursue foreclosures.

JPMorgan is the nation's third-largest mortgage servicer, overseeing $1.08 trillion of loans in the first quarter, according to Inside Mortgage Finance of Bethesda, Maryland.

Rogers rejected the bank's argument that she lacked jurisdiction by virtue of its April 2011 settlement with U.S. regulators to address servicing and foreclosure deficiencies.

Seven other servicers were part of that settlement, including Wells Fargo & Co (WFC.N: Quote), Bank of America Corp (BAC.N: Quote) and Citigroup Inc (C.N: Quote). (here)

JPMorgan was not immediately available for comment on the lawsuit, which was filed last July.   Continued...

The lobby of JP Morgan headquarters is photographed through it's front doors in New York May 11, 2012. REUTERS/Eduardo Munoz