March 3, 2015 / 3:55 PM / 3 years ago

JPMorgan to pay $50 million over improper mortgage practices

WASHINGTON (Reuters) - JPMorgan Chase (JPM.N) will pay $50 million as part of a national settlement agreement to compensate homeowners in bankruptcy over the use of robo-signing and other improper practices, the Department of Justice said on Tuesday.

A sign is seen outside the headquarters of JP Morgan Chase & Co in New York, in this file photo taken September 19, 2013. REUTERS/Mike Segar

The settlement includes cash payments, mortgage loan credits and loan forgiveness to more than 25,000 homeowners, the department said in a statement.

Between 2011 and 2013, JPMorgan Chase filed more than 50,000 mortgage payment change notices in bankruptcy courts that had not been improperly signed and reviewed.

More than 25,000 of them had the signature of former or current JPMorgan employees who “had nothing to do with” reviewing the accuracy of the bankruptcy filings, the department said.

“Our payment change notices were appropriately reviewed and substantively correct in the overwhelming majority of cases even though the process for filing them electronically was flawed,” JPMorgan spokesman Jason Lobo said in an emailed statement.

    He added that the company had improved its processes on electronic signatures for bankruptcy filings.

    As part of the proposed settlement, JPMorgan Chase agreed to pay $22.4 million in credits and second lien forgiveness to about 400 homeowners. Another $10.8 million will be paid in the form of credits or refunds to more than 18,000 homeowners.

    The lender will also allow its operations to be scrutinized by an independent compliance reviewer.

    The settlement is subject to court approval.

    Reporting by Lindsay Dunsmuir; Editing by Emily Stephenson and Dan Grebler

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