The Incorporated Village of Hempstead

Hempstead dumps JPMorgan Chase account

Originally published: April 5, 2011 6:35 PM
Updated: April 5, 2011 7:52 PM

Hempstead Village may be the first New York municipality to close its JPMorgan Chase account because of the bank's mortgage modification practices, village officials said.

Officials announced Tuesday that Hempstead would withdraw $12.5 million from Chase over the bank's failure to modify mortgages for African-American and Hispanic residents.

"Sometimes you have to take a chance, and the Village of Hempstead has taken a chance," said Mayor Wayne J. Hall, referring to the village's participation in New York Communities for Change's statewide campaign to get municipalities to close accounts with Chase.

This marks the first time a municipality has taken such action. "This is history that we are making today," said Diane Goins, a member of New York Communities for Change.

The village's board of trustees unanimously passed a resolution Monday night designating seven banks that could receive village deposits. Bank of America made the list; Chase did not.

In January, the New York group released a report stating that Chase has given affordable mortgage modifications to 6 percent of New York borrowers. The group wants Chase to stop all foreclosures, revise its mortgage modification process and pay restitution to homeowners who lost their properties because they were denied modifications.

"Chase has served the financial needs of the Village of Hempstead well for more than three decades," said Chase spokesman Michael Fusco. "In New York, Chase has offered 50,000 modifications to struggling borrowers and has prevented seven foreclosures for every one foreclosure here."

But village resident Maribel Toure, 49, an X-ray technician, said she had tried three times to modify her $298,000 home loan with Chase. Toure is now four payments behind on the home she has lived in for seven years with her husband and four children, ages 10 to 19.

Toure's architect husband lost his job in May 2008. A month later, she was hit by a taxi and couldn't work for four months.

"We asked Chase for help and the first answer was we were too rich," said Toure, who plans to take court action against Chase to prevent her house from being the fourth on the block to be foreclosed on. "Then the answer was we were too poor."