Class action lawsuit is sometimes an effective way to get legal redress for a group of people who have suffered for the same problem within a company. Back in January 2017, JPMorgan Chase Mortgage Class Action Lawsuit allegedly discriminates against African-American and Hispanic borrowers by the thousands. The claim was that JPMorgan Chase Co. has charged minority borrowers especially African-American and Latino mortgage borrowers higher than white (Caucasian) borrowers.
The Case of the Class Action Lawsuit
JPMorgan Chase has agreed to pay $55 million to settle justice department lawsuit related to the banks discriminatory practicing towards African American and Latinos house mortgage borrowers during the great recession. According to Chase Mortgage Class Action Lawsuit complaints, the bank has allowed affiliate independent brokers to charged minorities borrowers higher mortgage than their white counter-part in 2006 to 2009.
It was at least estimated that 53.000 African-American and Latinos borrowers were victims to another one Wallstreet’s illegal and ugly “Hustles”. The company spokesman stated that they have agreed to settle for $55 million without admitting any liability. They deny any wrongdoing and remained towards providing the people of the country access to credit equally.
No bankers were sent to prison because of this Chase Mortgage Class Action Lawsuit, although it was a criminal conduct. The fine is considered to be a very small ripple considering JPMorgan Chase & Co. made $24 Billion in 2016.
In Chase Mortgage Class Action Lawsuit, the case was filed by Preet Bharara, a Southern District of New York U.S attorney. He alleges that JPMorgan Chase & Co. was charge with $1,000 more than Caucasian borrowers within the same risk profile. Altogether, this caused millions of dollars in damages towards the minority borrowers. These allegations were denied by JPMorgan Chase attorneys who the U.S government looked for civil penalties and prevention for further discrimination aside from the settlement.
The average African American borrower with an average loan of $191,100 should pay around $1,126 over the first five to six years. For Latino borrowers, with a loan of $236,800, they must pay about $968 more according to the government. The bank gave smaller mortgage-brokers firms the discretion in adjusting the price in relation with the borrower’s risk with no documentation or justification. Chase mortgage Class Action Lawsuit was added towards Chase’s brokers. The lawsuit accuses chase’s brokers with bonuses for charging above normal credit fee.
Although the main problem is these small brokers in Chase Mortgage Class Action Lawsuit, according to what Bharara find that JPMorgan Chase had a legal responsibility towards the customer not only through the brokers. JPMorgan Chase had legal access and responsibility to determine pricing discretion was used in violation or not. Either way, JPMorgan Chase’s main failure was monitoring their broker’s pricing, and preventing future practicing that resulted in a violation and discrimination.
On the same day of the reported Chase Mortgage Class Action Lawsuit settlement, JPMorgan Chase was also filed by the Labor Department, alleging the bank discriminate female employees by paying less than men in similar jobs.