WASHINGTON—A J.P. Morgan Chase & Co. executive, at a U.S. House hearing Wednesday, apologized for wrongly foreclosing on military families and overcharging thousands for mortgages, as lawmakers weigh whether new legislation is needed to help prevent military personnel from losing their homes and getting hit with high interest rates.
“We failed to comply with aspects of the law,” Stephanie Mudick, executive vice president of J.P. Morgan’s office of consumer practices, told the House Committee on Veterans’ Affairs. She said the company is embarrassed over the matter, and apologized for the bank’s errors. “We deeply regret that service members have been overcharged and in some cases faced foreclosure because of these errors,” she said in her prepared testimony. “We are acting to make these customers whole as soon as possible and enhancing our safeguards to prevent such mistakes going forward. Chase is determined to get this right.” But lawmakers didn’t sound satisfied. In a heated exchange, California Rep. Bob Filner, the top Democrat on the panel, made it clear he doesn’t think an apology is enough. “You broke the law. How are we going to hold you accountable?” Rep. Filner said. “Everything is impersonal. Nobody is ever responsible and yet these people’s lives are turned upside down. You can’t just apologize…and then, this is over.”
Ms. Mudick said the bank has made operational changes to better handle military loans and is reaching out to customers who may be in the military to advise them of their legal protections. Chase initially found it overcharged at least 4,000 military personnel in active service and took the homes of 14. A U.S. Marine Corps captain had filed a lawsuit alleging he was overcharged by Chase in violation of the Servicemembers Civil Relief Act, or SCRA, that caps interest rates and stops foreclosures for active-duty service members.
In January, after conducting an internal audit, Chase acknowledged its mortgage errors. However, Chase’s testimony Wednesday shows the firm has now found more problems–it said it overcharged 4,500 active-duty military members and wrongly foreclosed on 18.
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