On May 6, 2014, a class action lawsuit was filed in New York against JP Morgan Chase, alleging that the company failed to file proof of mortgage satisfaction in a timely manner, as required by state law. A mortgage satisfaction is a document generated and signed by a mortgage lender, acknowledging that the borrower has paid off the mortgage in full. To update the property deed and to obtain clear title to the property, a mortgage satisfaction document must be filed.
The lawsuit alleges that the bank often fails to file mortgage satisfactions on time, blocking the closure of deals and complicating the work of title insurers. The complaint also alleges that this practice can prevent property owners from obtaining the clean title needed to complete a property sale or refinance a mortgage, causing financial hardship for homeowners.
According to the complaint, under New York state law, a mortgage satisfaction must be filed within 30 days or the servicer must pay a $500 fee, with penalty increases to $1,000 after 60 days, and $1,500 after 90 days.
The lawsuit seeks to represent a class of New York residents who paid off a mortgage in full after 2008, after which JP Morgan failed to timely file a mortgage satisfaction within 30 days.
Similar Class Action Lawsuits Previously Filed Against JP Morgan
Three months earlier, a similar action was filed against JP Morgan in Pennsylvania federal court, alleging that JP Morgan had failed to present a satisfaction of mortgage upon the plaintiff’s payment in full. The complaint also alleges violations of New York state law and points to the importance of these statutes for ensuring that the transfer of real estate property is efficient and reliable.
According to the complaint, the plaintiff’s satisfaction of mortgage was recorded more than 88 days after she paid the balance in full. The complaint alleges that JP Morgan broke the law by failing to file the mortgage satisfaction within the required 30 days.
Both complaints against JP Morgan allege that the delayed filing of mortgage satisfaction documents is a regular practice for the company.
“Based on a review of county records, defendant appears to have failed to timely file mortgage satisfactions in thousands, if not tens of thousands, of instances,” the complaint stated.
Ocwen Loan Servicing Faces Mortgage Satisfaction Class Action
On May 19, 2014, a homeowner filed a putative class action lawsuit against Ocwen Loan Servicing, LLC in Pennsylvania federal court, alleging that Ocwen consistently failed to file mortgage satisfactions in a timely manner, in violation of the federal Mortgage Satisfaction Act and the U.S. Real Estate Settlement Procedures Act.
The Mortgage Satisfaction Act (MSA) and the Real Estate Settlement Procedures Act (RESPA) both require that a formal satisfaction of a loan be filed within 60 days of receiving a written request, following payment of a mortgage loan in full.
According to the complaint, the plaintiff submitted multiple written requests that the company file a mortgage satisfaction upon receiving final payment. However, the complaint alleges that Ocwen did not record a satisfaction of the lien until months afterward, preventing the plaintiff from properly refinancing her first mortgage.
The lawsuit seeks to represent a class of people who had mortgages serviced by Ocwen and did not have their loans formally satisfied within 60 days of making a request.
Delayed Mortgage Satisfaction?
If you have experienced issues with your mortgage servicer and the satisfaction of your loan, contact our consumer lawyers for a free, confidential attorney consultation by calling 866-981-4800, or filling out the form to the right.