Business & Economy

Facing foreclosure, Southland homeowners sue JP Morgan Chase

A foreclosure sign hangs on a fence in front of a foreclosed home in California.
A foreclosure sign hangs on a fence in front of a foreclosed home in California.
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Southland homeowners and an advocacy group are suing a major mortgage lender, claiming that it plans to foreclose on a property after a family qualified for a loan modification.

The family that’s suing — the Velascos of Pacoima — assembled reporters on the manicured lawn of a house that might go to someone else in a foreclosure sale next Monday. 
Samuel Chu of the activist organization One LA spoke in support of the Velascos saying, "Today we stand here, the community of One LA with the Velasco family to say, enough is enough!"
Armando and Anabeht Velasco brought up their three children in the Pacoima home they’ve occupied for 20 years. They started out renting before they bought the house from their landlord a dozen years ago. But the Velascos ran into money trouble about three years ago. Armando Velasco lost his job at a real estate office, then his factory job. The family couldn’t make its payments on time.
So the Velascos modified their home loan through the federal Home Affordable Modification Program a couple of years ago. The husband now drives a truck, and his wife works in maintenance for the City of Los Angeles Department of Recreation and Parks. 
The family’s new mortgage payments run about $1,900 a month. The Velascos say they haven’t missed a payment. That didn’t stop foreclosure notices from arriving in the mail, sometimes 10 at a time.

"It hurts my heart to see my dad open these letters and almost collapse," said daughter, Michelle Anabeth Velasco, fanning out the letters for emphasis, "I’ve never seen my dad so weak when he sees these letters, it’s so difficult, it’s difficult for me and my brother and my sister to see my mom and dad fall into this depression."
Her parents are trying to hold off foreclosure and they’re each suing JP Morgan Chase for at least $2 million for emotional distress.
"Unfortunately, because it’s pending litigation, there’s not much I can say about the case. I can tell you that the Velascos do have a permanent modification in place, so there’s no sale scheduled," said Gary Kishner, a California-based spokesman for JP Morgan Chase.
Kishner could not comment about why the Velascos continued to receive foreclosure notices from the bank. He added that in the last two years, Chase has prevented two foreclosures for every one it carries out.