JPMorgan, Bank of America, Wells Fargo Accused Of Overcharging Military Veterans
In what is only the latest instance of questionable mortgage practices coming to light, a new lawsuit claims that 13 banks and mortgage companies -- including Bank of America, Wells Fargo, JPMorgan and PNC Bank -- charged hidden, illegal fees to military veterans trying to refinance their homes.
The lenders, unable to charge certain fees under U.S. Department of Veterans Affairs rules, simply increased another set of fees without making it clear to veterans that they were doing so, the suit alleges.
The result was hundreds of thousands of cases where veterans trying to refinance their homes ended up paying between $300 and $1,000 more than they were supposed to, according to the suit.
The veterans' loans are some of many of misleading or fraudulent loans that banks made during the housing bubble that are only recently coming to light.
Nearly 30,000 such cases were uncovered this past spring alone, a majority of them involving real estate deals made in 2007 or before.
Many of the banks named in the new hidden-fees suit -- which was filed in 2006, but whose details were public this week -- have been accused in the past of taking advantage of military servicemembers.
In February, Wells Fargo agreed to refund some $10 million in fees to veterans after a similar lawsuit alleged that the bank charged improperly high fees to veterans undertaking the refinancing process.
Around the same time, JPMorgan acknowledged that it had overcharged thousands of active military personnel on mortgages and improperly foreclosed on the homes of nearly 20 enlisted men and women.
Veterans face a particularly high number of challenges in the current economic climate. The unemployment rate for veterans is well above that of the overall population, in part because many members of the military often return to the civilian workforce without a college degree, and find it difficult to land steady employment.
Homelessness rates for veterans are also higher than average, a problem that has been exacerbated by the foreclosure crisis and by predatory lenders who approach veterans with disadvantageous refinancing deals. Current and former military personnel are typically a high-risk group for harmful payday loans, as they often draw low salaries and have few readily available sources of help when they get into debt.