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SCVNews.com | Foreclosed-on Veteran Sues Bank Over ‘Dual Tracking’ | 01-20-2014
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911H4Hflag[KHTS] – Sixteen months after Habitat for Humanity volunteers rehabbed his Stevenson Ranch home, a military veteran is suing JP Morgan Chase over what he claims was an illegal foreclosure.

Tom McDivitt, a 10-year Army veteran and trained nurse, filed suit after the bank denied him the opportunity to follow through on a program he signed up for to help his family keep his home, he alleges.

McDivitt said his family ran into financial trouble after his wife, Stacey, became ill.

“We reached out for help and had to declare bankruptcy so that we could keep our head above water,” he said.

When he contacted the bank, he began a HAMP program, or Home Affordable Modification Program, which is “part of the Obama Administration’s comprehensive plan to stabilize the U.S. housing market by helping homeowners get mortgage relief and avoid foreclosure,” according to the program’s website.

For those in financial trouble, sthe program offers assistance to avoid foreclosure and reduce the monthly payments.

However, the bank used it to engage in a practice called “dual tracking,” according to McDivitt’s lawsuit. That’s when a bank works with a customer who is behind on a mortgage while going forward with foreclosure proceedings on the same home.

Habitat for Humanity volunteers work on the McDivitt home in September 2012.

Habitat for Humanity volunteers work on the McDivitt home in September 2012.

The practice was outlawed in California under a bill signed by Gov. Jerry Brown in July 2012.

After receiving approval and making payments on the HAMP loan, he was told by Chase to send information and that his second loan would be modified.

The lawsuit alleges at that point, the McDivitt reached out to JP Morgan Chase to let them know about the situation.

However, 11 days later, his home was foreclosed upon, according to the McDivitt’ attorney.

The financial institution asked for paperwork regarding the HAMP, and while the paperwork was being filed, the lawsuit alleges that a practice called “dual-tracking” was taking place.

“In the meantime, we got a letter posted on our door saying that the loan was sold to a management company and we need to move out in 30 days,” he said.

The HAMP payments were current at the time of the foreclosure, McDivitt said, so the family never had a legitimate chance to follow through on the program they thought would save it.

911H4HPaintThe McDivitts had received help from Habitat for Humanity’s Homes for Heroes project in September 2012. The program uses volunteer labor and donated materials to help with painting, carpentry and general maintenance. The same organization is developing an affordable housing community in Saugus to help veterans transition into home ownership after their service.

Lawyers for the defendants named in McDivitt’s lawsuit were contacted for this story and declined to comment.

The lawsuit seeks a rescission of the alleged “unlawful transaction.”

Tom McDivitt said he saw TV news segment on Chase and its loan program a couple of months ago.

“It mentioned the exact same practice they were doing to us, where they sold off the loan to an investment company, if you’re not current on it, and the investment company foreclosed on the house,” he said. “It was more profitable for them to do that.”

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4 Comments

  1. linda says:

    I’ve been through this type of dual tracking. It terrible! I felt helpless and couldn’t believe this type of thing was allowed in the u.s.a. in which having a house is part of the American dream. We ultimately sold in a short sale and are renting now after 18 years of home ownership. My heart goes out to this family.

  2. You go this is sad and wrong

  3. The practice of Dual Tracking is also known as Parallel Foreclosure.
    I started a blog several years ago when Parallel Foreclosure was in its infancy. Click above to see the site.

    Not sure why Parallel Foreclosure is legal. Ultimately, a federal program is used to lure people into losing their home. Just the act of applying for HAMP apparently lowers one credit score. Something is very wrong.

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