California Real Estate Fraud Report

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JP Morgan Chase Target of Class Action Lawsuit

A federal district court judge in Chicago has given approval to consolidate eight separate lawsuits against JP Morgan Chase for reducing, freezing or canceling the credit lines of its consumers based on automated appraisal software.

Judge Rebecca Pallmeyer’s ruling rejected the motion by the lending giant to dismiss the case, whose litigants reside California, Minnesota, Illinois, Texas, Arizona and Ohio. If, as expected, other customers of JP Morgan Chase join the litigation, it could develop into a huge class action lawsuit.

The lawsuit will test two (2) important concepts: first, whether the federal Truth in Lending Act applies to home equity lines of credit (HELOC) and whether automated appraisal software is so accurate it may used in place of the traditional human appraiser.

In the past, online real estate company Zillow was sued by homeowners claiming its estimated appraisals were inaccurate. Zillow is now the target of a lawsuit by CoreLogic, which claims CoreLogic holds the patent to “automated valuation software“. And CoreLogic has been sued by the FDIC for “gross negligence, breach of reps and warranties, and other breaches of contract for providing defective and/or inflated appraisals” in its appraisal work for now-defunct Washington Mutual, aka WaMu according to a blog post in the Big Picture.

Read the original article in the Los Angeles Times.


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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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