JPMorgan Allegedly Forecloses On Home Two Months After Its Purchase

Pedestrians walk by a sign outside of a JPMorgan Chase office on May 14, 2012 in New York City. Allan Danforth of Kansas City is suing JPMorgan Chase for foreclosing on him by mistake two months after he bought his house in a short sale, KMBC reports.

That $2 billion trading debacle isn't all JPMorgan Chase has to deal with this week.

Allan Danforth of Kansas City claims that he bought a house in a short sale in September 2010 from homeowners whose mortgage was held by JPMorgan, KMBC reports. Then two months later and without warning, JPMorgan foreclosed on the home, changing the locks and taking away his furniture, appliances and family items. Danforth is now suing JPMorgan for trespassing and theft.

Danforth's suit is likely no more than an afterthought to a bank struggling with a large-scale problem -- a $2 billion trading loss that's injured the company's reputation and prompted some shareholders to propose CEO Jamie Dimon give up his role as chairman.

Short sales, in which properties are sold for less than the amount owed, have become promoted as an increasingly promising alternative to foreclosure, but Danforth's experience suggests the process can still leave something to be desired. All together, there were more short sales than foreclosures in January, according to data from Lender Processing Services cited by Bloomberg, and many housing experts viewed that as a promising sign that foreclosure alternatives were being pursued.

In addition, critics allege that banks' mortgage paperwork has been disorganized -- so disorganized, in fact, for banks to be able to acknowledge receiving new paperwork. Foreclosures have subsequently been criticized as at times impersonal and sudden, with little opportunity for borrowers to negotiate with banks.

In another example of foreclosure confusion, a realtor sold Terry Jordan of Mississippi the wrong foreclosed home after she already had started renovations, according to WREG. The realtor blamed the bank, which he said had given him the wrong information.

Other Kansas City homeowners also are suing a major bank because of foreclosure. Vicki and Richard Sutliffe, a couple in Kansas City, are suing Wells Fargo because the bank allegedly offered mortgage modifications with no intention of making them permanent, according to Courthouse News Service. A judge recently dismissed part of their lawsuit.

JPMorgan Chase temporarily suspended 50,000 foreclosures in September 2010 after concerns arose about the validity of its foreclosure documents. At the time, a JPMorgan spokesman confirmed to the AP that JPMorgan employees had signed off on some foreclosures without verifying the documents.

Bank of America also temporarily halted foreclosures in all 50 states in October 2010 because of concerns about the validity of its foreclosure documents.

Comments

[Dr Surf]

05:23 PM on 10/09/2012

The banks are stealing more than any one person passing a note to bank teller that says, " this is a hold-up." And, nobody goes to jail. The CEO and board have fiduciary responsibility. I think it time to make CEO's and boards criminally responsible for employee actions that constitute corporate negligence and callous disregard. Give 'em a perp-walk.

[balodis]

05:59 PM on 10/09/2012

The US government holds the CEO of any nuclear utility, architect-engineering firm, nuclear supplier criminally responsible for any safety problems that result in a nuclear accident. Why doesn't the US Government hold the CEO;s of Bank, Investment houses, etc. criminally responsible for major financial debacles on their watch??!!

[sgentilejr]

04:08 PM on 10/09/2012

If you think the bank screw_ups are bad now__wait a few months______ when Bank of America lays off an additional 16,000 back office employees and their record keeping really gets bad with far less employees to do the work.

[sgentilejr]

04:03 PM on 10/09/2012

Based upon the information below___I do not see why Mr. Danforth did not go to the police department and file Criminal Charges for the bank stealing his property and for their Illegal break-in at his home.
You can bet your bottom dollar that if you broke into a Bank of America branch office and removed their computers and office furnishings and cleaned the place out to bare walls and changed the locks___you would be locked up already. Whatever bank employee signed those foreclosure orders should be facing CRIMINAL charges..________________________________________________________________________
Allan Danforth of Kansas City claims that he bought a house in a short sale in September 2010 from homeowners whose mortgage was held by JPMorgan, KMBC reports. Then two months later and without warning, JPMorgan foreclosed on the home, changing the locks and taking away his furniture, appliances and family items. Danforth is now suing JPMorgan for trespassing and theft.

[Stephen a Fazekas]

07:30 PM on 05/16/2012

This bank must be destroyed. Youll never see it happen, Obama loves this bank and guess what.
regardless of who wins in November Jamie Dimon will be our next secretary of the treasury

[balodis]

06:08 PM on 10/09/2012

You are starting to sound like Hitler, general Franco and Joe McCarthy who saw communists everywhere. Wall Street is proud of your support. See you in the bread line after Romney's election.

[zograp]

08:57 AM on 05/16/2012

Finally, realize that the HAMP rules were not set up for the benefit of borrowers. HAMP is a program designed as a giveaway to Pres. Obama's corrupt friends running the big banks. While showing that you were encouraged to default might be helpful (in some states) in delaying or avoiding foreclosures, in most places, courts have held that this is OK. Almost ALL of the banks routinely encourage borrowers to default and then take their homes. This is simply business as usual.
The Obama administration supports these efforts, as this is part of the President's program to end all private home ownership in the United States.

[mgrant33301]

07:09 AM on 05/16/2012

i hope he wins, big time. unfortunately, it won't change the banks' behavior. and they are really so screwed up they don't know what their own departments are doing.

[captaincrawley]

06:31 AM on 05/16/2012

Anyone who has spent any time working in or with corporate America will be surprised that anything gets done right, considering the massive number of people working there who are screw-ups or simply don't care.

[byoungusa]

01:54 AM on 05/16/2012

Just an interesting aside, I read an article not long ago about how risky it really is to buy forclosed homes. It seems that if the paperwork on a large percentage of forclosed and short sale homes have very suspect paperwork and if people actually start pushing these situations the banks may have trouble proving that they have the right to have sold these homes.

[K August]

06:30 AM on 05/16/2012

True. ...people need to very careful.......
There was even an article on H P about an investigative reporter looking into those types of deals and he found out that HE didn't own the foreclosed on house he bought and had been making payments on for 3 years!

The banks bundled the mortgages and sold them over and over again and nobody knows who actually hold the titles to any of the homes! It's THAT bad!

If anyone is facing foreclosure......look up the stories about forcing them to PROVE they have the title to your house. 90% of the time they apparently can't........so they can't legally foreclose because they don't technically own the house.

[mgrant33301]

07:11 AM on 05/16/2012

i am a realtor. i deal primarily with short sales. you would be shocked by some of the stories i could tell you about the big banks and how incredibly disorganized they are, and how their own actions cost them thousands in each transaction. it's really shocking.

[big tom]

10:24 AM on 05/16/2012

i am a broker on ohio.... the inmates have taken over the prison...i quit showing bank owned and short sales.... they want us to work for 2.00 per hr to fix the mess they created... not me.

[wolfml1]

01:21 AM on 05/16/2012

Arrest the Bank Employees First thing. Put them in Jail, then start proceedings to have them go to Prison. After that no foreclosures until the Banks fix the paperwork.

[propackage]

12:38 AM on 05/16/2012

As long as the banks and the government are in bed together this will continue

[Meerkatx]

12:30 AM on 05/16/2012

Banks are the new wild wild west. Anything goes, and if you get caught in the crossfire it's your own fault as far as they are concerned.

[YEA BOY]

11:55 PM on 05/15/2012

hope he sues for 500,000. and add 50million for punitive damages

[K August]

06:31 AM on 05/16/2012

No amount of money can replace things like photo albums etc.
It's heartbreaking every time I read that this happened to yet another family.

[VictoryBlue]

02:01 PM on 05/16/2012

No, but it can make the landing a lot softer.

[bran0217]

11:51 PM on 05/15/2012

Just another story of the rich robing the middle class ,He should go to jail .He broke banking laws .This is whats going to happen even more if Romney is elected

[dkmkc2000]

11:51 PM on 05/15/2012

No in reality forclosures are still happening by the banks, espescially BOA, long after many applied for HAMP repeatively. The settlements were made by the states to buy time.

[Veri]

11:37 PM on 05/15/2012

It is simple. The banks took a few hundred years of solid paperwork and deed registration and handed it over to MERS in an effort to cut costs. No one knows, anymore, who owns many properties. And the problem is widespread.

Banks have and are resorting to illegally manufacturing paperwork to prove any sort of ownership. People are going to have to wait decades before they know if they own their own home bought at these sales - and not, legally, someone else. Current homeowners can't even be sure they are paying the right mortgage holder.

Ah, the smell of American Capitalism... it smells like... F A I L.

[bipolarbears60]

12:38 AM on 05/16/2012

This is just tragic.

[propackage]

12:41 AM on 05/16/2012

nothing to do with capitalism. It has to do with the cozy relationship between banks that donate great sums of money to candidates and the Candidates which take great sums of money from people they are overseeing. There are laws to prevent it but why shoudl either side do it since they both benefit

[frankieshoes1]

01:41 AM on 05/16/2012

It has everything to do with Capitalism. If we had true capitalism this would never have happened because all the big banks would be bankrupt.

[Veri]

10:17 AM on 05/16/2012

Ack! Mein Herr! You are F A I L. Karl Marx, as Better-Dead-Than-Red Patriots note, wrote that Socialism leads to Communism and THIS IS WHY, thou shalt not embrace socialism as thy God.

Well, it works both ways. Free Market Capitalism leads to Red Capitalism. Think of it this way:

State Monopoly - Corporate Monopoly
State Control - Corporate Control
Ministries - Corporate Monopoly
Premiere & Politburo - Oligarchs & Plutocrats

Well, Socialism and Free Market Capitalism leads to:

Control of the Sate by Communism and Corporate Monopolies, respectively - all led by Comrades.

Better dead than Red, eh Comrade Capitalist?