The Trial Against Bank and Developer For Defrauding Foreclosure Victims Has Been Delayed

January 2nd, 2009 | Tags: Foreclosure Victims

District Judge Christopher Connor has delayed the trial against J.P Morgan Chase and Developer Poconos for defrauding over one hundred foreclosure victims. The date has been shifted from February 2009 to June 2009 in the hope of a negotiated settlement. The talks are scheduled to be held under the auspices of retired Judge M. Welsh on 28th January 2009. Conner took the initiative in arranging for the finding the middle ground.

Conner delivered a strong opinion saying, “The record supports the conclusion that the Chase defendants” helped by Gene Percudani sold houses at inflated values. The suit was filed in 2002. It named many that many were engaged in massive fraud and sold houses in Monroe County at falsely inflated prices through many companies of Percudani – Raintree Home, Why Rent and Chapel Creek Mortgage.
Morgan Chase participated in these schemes by not following its normal guidelines. Most of the borrowers were those with poor credit who were lured in by an advertising programme of Poconos. Why Rent aggressively pushed the idea of not renting but trying to own a house for a down payment of only $1,000 and a monthly payment schedule of $685. But in reality the payments turned out to be much higher. The mortgage was far above the actual worth of the house. This made it impossible for the borrower to either resell or refinance the house. Many were pushed into bankruptcy as well as foreclosure. All suffered untold financial and mental hardships.
Chase Manhattan Mortgage (branch of JP Morgan Chase) strongly negated the accusations saying that Percudani was a fraudulent builder who had cheated Chase by making these loans. Chase also said that as soon it got wind of the scam it reduced the loan principal on over 200 mortgages in 2002. This was after appraisers appointed by Chase found out that some of the houses were sold for more than $50,000 of its actual value.
The depositions continued for six years. At the end it appears that the former employees of Chase was not ignorant about the scam but rather they set up new underwriting rules to get the mortgages sanctioned. Many of these did not run into default until Chase sold them to the secondary market of Fannie Mae and Freddie Mac. No spokesperson of Chase was available for comment. Percudani is contesting the allegations and has now shut down his house building business.
Via