Legal News

WaMu and JPM accused of squeeze-and-freeze in SoCal suit

By Richard Binder

Michell Kimball, a San Diego-area resident who took out a $500,000 home equity credit line from Washington Mutual in the fall of 2007, has filed a lawsuit against JPMorgan Chase and WaMu, alleging the two companies illegally reduced or froze customers? home equity credit lines.

According to the suit, JPMorgan recently sent letters to thousands of customers with home equity credit lines across the country, informing them that their accounts had been suspended because of the decline in value of the property securing those lines of credit. According to the suit, the bank hasn?t disclosed to customers how much the value of their property has fallen or how that value was calculated. The suit also alleges JPMorgan and WaMu are in violation of federal law for using a ?dubious? formula for reducing or freezing credit limits that is ?vulnerable to manipulation."

A jury trial is demanded. The size of the group involved in the lawsuit is unclear.

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Full post as published by Legal Pad | LA on June 10, 2009 (boomark / email).