Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 1 of 21

EXHIBIT 13
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 2 of 21

Per~
Coie
30 Rockefeller Plaza, 22nd Floor
New York, NV 10112-0085
Gary F. Eisenberg
PHONE: 212.262.6900
PHONE: (212) 262-6902

PAX: (212) 977-1632 FAX: 212.gn,1649

EMAIL: GEiscnbcrg@pcrkinscoic.com
www.perkinscoie.com

March 5, 2014

VIA HAND DELIVERY

JPMorgan Chase Bank, N.A.

270 Park Avenue
New York, NY 10017
Attn: Stephen M. Cutler, Esq.
General Counsel
Additional Addressees Referenced Below

Re: Systematic and Ongoing Abuse of Mortgage Resolution Services, LLC, 1st Fidelity
Loan Servicing, LLC and S & A Capital Partners, Inc. by JPMorgan Chase Bank,
N.A., Chase Home Finance LLC and its Affiliates

Dear Ladies and Gentlemen:

Our office represents Mortgage Resolution Services, LLC ("MRS''), 1st Fidelity Loan Servicing,
LLC ("1st Fidelity") and S & A Capital Partners, Inc. ("S & A"} (collectively the "Schneider
Entities").

JPMorgan Chase Bank, N.A. ("JPMorgan"} and its subsidiary, Chase Home Finance, LLC
("Chase"}, know that, for years, they have committed and continue to commit harms on a
massive scale against the Schneider Entities. The Schneider Entities are sending you this letter
to set forth the basic grounds upon which they intend to hold JPMorgan and Chase accountable
for those harms. We understand that this correspondence has been expected and will be
addressed immediately.

The Scheme to Evade the Lender Settlements

JPMorgan and Chase are parties to the National Mortgage Settlement Agreement ("NMSA"),
RMBS Settlement ("RMBS"}, Bear Stems/EMC Settlement ("BS/EMC") and various other
settlements entered into with the many branches of government (collectively, the "Lender
Settlements"). Based on the information set forth herein and the documents that the Schneider
Entities have compiled, they can prove that JPMorgan and Chase have been harming, and

LEGAL120020004.3
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Perkins Coie LLP

 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 3 of 21

JPMorgan Chase Bank, N.A.

March 5, 2014
Page2

continue to harm, the Schneider Entities. JPMorgan and Chase have perpetrated this harm to
further a scheme they have designed to evade their responsibilities under the Lender Settlements.

Separate and apart from the Lender Settlements, JPMorgan and Chase are continuing their
pattern of large-scale tortious interference with the contractual relationships between the
Schneider Entities and the borrowers whose loans JPMorgan and Chase sold to the Schneider
Entities. Indeed, both before and after the Lender Settlements, JPMorgan and Chase have
trampled upon the Schneider Entities' rights under these loans with purposeful disregard. This
pattern includes the releasing of hundreds of liens by JPMorgan and Chase on loans they
previously sold to the Schneider Entities. The Lender Settlements do not absolve JPMorgan and
Chase for the damages they have inflicted upon the Schneider Entities.

The Schneider Entities have catalogued precisely how and why JPMorgan and Chase have
undertaken these wrongful acts. The Schneider Entities possess a library of documents that
clearly prove these wrongs, even beyond wrongs such as the actual lien releases that JPMorgan
and Chase have pennanently and publicly recorded. The Schneider Entities' knowledge of the
mortgage industry, coupled with their meticulous documentation, allows the Schneider Entities
to tie these wrongful actions to malicious motives of JPMorgan and Chase.

The Schneider Entities' damages are on a scale exceeding the collective face value of the loans
that the Schneider Entities own. Unless JPMorgan and Chase respond constructively, in a way
that sets forth a direct path to full compensation of the Schneider Entities, within five (5)
business days of the date of this letter, the Schneider Entities are prepared to pursue their legal
rights and remedies aggressively. This will lead to enonnous damages liability against
JPMorgan and Chase, significant negative publicity and, perhaps, issues of non-compliance with
the Lender Settlements.

Background re Long-Term JPMorgan/Chase Relationships with Schneider Entities

Starting in 2005, the Schneider Entities regularly purchased defaulted residential mortgage loans
("RMLs") from Chase. In aggregate, the Schneider Entities of 1st Fidelity and S & A have
purchased RMLs from Chase with a face value of over $100 miJlion. Together with loans that
MRS has purchased (under the MLPA, described below), the Schneider Entities collectively
purchased from JPMorgan and Chase over 5,000 loans between 2005 and 2010 in an aggregate
principal amount of over $250 million. The JPMorgan/Chase pattern of misconduct permeates
this collection of loans, undermining the entirety of the Schneider Entities.

The Schneider Entities commonly provided avenues for ·homeowners to keep their homes,
rebuild their credit and realize a renewed peace of mind. Chase and its representatives regularly
acknowledged these successes. In short, the Schneider Entities' model was able to achieve
results that Chase could not.

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JPMorgan Chase Bank, N .A.

March 5, 2014
Page 3

Through this business model, 1st Fidelity and S & A built strong portfolios with high levels of
succ_ess. Subsequent actions by JPMorgan and Chase saddled the burden· of their violations upon
1st Fidelity and S & A, thereby damaging, beyond calculation, those successful portfolios.

Further; relying on the established successful relationship between Chase and the Schneider
Entities, Chase defrauded MRS, the third of the Schneider Entities, into executing that certain
mortgage loan purch~se agreement ("the MLPA"), dated February 25, 2009. Chase designed this
scheme in 2008, after JPMorgan and Chase settled with the government for predatory mortgage
servicing practices perpetrated by BS/EMC prior to its acquisition by JPMorgan. Upon realizing
they were engaging in these same illegal practices, JPMorgan and Chase targeted the Schneider
Entities as part of a scheme to conceal this non-compliance and pass on their liabilities.

As part of this, JPMorgan and Chase have perpetuated massive breaches of warranties under the
MLPA. Those harms have caused MRS millions of dollars in damages that continue to
accumulate and cannot be quantified. These breaches of the MLPA with MRS, coupled with the
vast array of breaches and torts that JPMorgan and Chase have leveled against 1st Fidelity and S
& A, have damaged the Schneider Entities to an immeasurable degree.

The "Charge off' Process - RCVl Queue

The enormous potential liability that JPMorgan and Chase have created by their actions under
the Lender Settlements flows from the process by which they have improperly handled (and
failed to service) defaulted mortgage loans that they deem to be not profitable enough to
foreclose. JPMorgan removes these loans from their active servicing queue and conceals them
within JPMorgan's unregulated "RCV I" Queue that it has established to administer (without
servicing) defaulted mortgage loans. Further, JPMorgan serially uses quinary collection
age·ncies that do not provide mortgage servicing functions. This set of actions, coupled with
JPMorgan's own institutional unwillingness to service loans properly, ensures that JPMorgan
violates its servicing obligations for hundreds of thousands of mortgage loans.

In an effort to evade liability for these legal violations, JPMorgan and Chase sought to conceal
their violations by passing them on to the Schneider Entities. As is apparent in other filings (that
we are aware JPMorgan and Chase have accessed), this process has impacted and will continue
to impact thousands of homeowners. By intentionally entangling (and at times specifically
targeting) the Schneider Entities through JPMorgan and Chase's scheme, they have ensured that
the ·resulting liabilities for the Schneider Entities will only continue to grow.

"2nd Lien Extinguishment Program" and "Alternative Foreclosure Process"

The subsequent two primary vehicles created for this rogue behavior are the misapplication of
the "2nd Lien Extinguishment Program" and the "Alternative Foreclosure Process." The
Schneider Entities have learned, and can document with particularity, how JPMorgan has been

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JPMorgan Chase Bank, N.A.

March 5, 2014
Page4

improperly using both of these programs for its own benefit to the detriment of homeowners and
the Schneider Entities.

The 2nd Lien Extinguishment Program was a proprietary initiative that the governments made
available to the Servicers of the NMSA Settlement to assist borrowers who applied for
modification assistance and had submitted the proper documentation for consideration. Instead
of applying the specific criteria set forth in the NMSA, Chase substituted its own self-serving
algorithm, referencing criteria such as the nll;JUber of months since charge off, last payment date
and age of loan to detennine the least valuable Joans in their portfolio. Because the bulk of these
borrowers were no longer living in the homes originally securing their loans, Chase's forgiving
of these loans undermined a major objective of the Lender Settlements - retained
homeownership.

In doing so, JPMorgan and Chase extracted wrongful gains from the forgiveness of uncollectible
loans, thereby transgressing - rather than aiding homeowners under - the Lender Settlements.
Making matters worse, they imposed the burden of further violations upon the Schneider Entities
by issuing forgiveness letters for loans belonging to our clients.

Further Lender Settlements violations arise from the failure of JPMorgan and Chase to service
loans properly and to deter community blight. Because JPMorgan and Chase deliberately do not
service loans, JPMorgan and Chase cannot meet those Loan Settlement obligations. In an effort
to circumvent these obligations, JPMorgan and Chase instituted the "Alternative Foreclosure
Process." The heart of the "Alternative Foreclosure Process" is that JPMorgan and Chase simply
file satisfactions of mortgages on subject properties, without notice to any interested parties
(including the current holders of the mortgages!) and with callous disregard for the multitude of
damages those acts cause. JPMorgan and Chase then walk away from their responsibilities
under the Lender Settlements.

JPMorgan targeted its "Alternative Foreclosure Process" to valueless RCVI first mortgage loans,
that it had previously failed to service in accordance with Jaw, thereby fostering community
blight. This'"Alternative Foreclosure Process" is JPMorgan and Chase's ongoing effort to
conceal those violations to try to make them disappear. The implications of leaving blighted
properties for the impacted municipalities are immense. Those resulting liabilities once again
draw the Schneider Entities inescapably into harm's way when JPMorgan deploys the
"Alternative F~reclosuie Process" against loans owned by the Schneider Entities.

The deliberate non-servicing of loans engenders an added problem for JPMorgan and Chase. In
deploying the "Alternative Foreclosure Process" and distorting the "2nd Lien Extinguishment
Program," JPMorgan and Chase have corrupted their data to such a degree that they continue to
release mortgages securing loans that the various Schneider Entities own. Compounding the
burgeoning litany of liabilities, the act of releasing these mortgages is triggering additional
violations of law. Borrowers and enforcement agencies are seeking to hold the Schneider

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JPMorgan Chase Bank, N .A.

March 5, 2014
Page 5

Entities liable for the consequences of these JPMorgan and Chase actions. This swells the
damages faced by the Schneider Entities by a seemingly incalculable order of magnitude.

These are not isolated instances. The Schneider Entities have just learned that JPMorgan and
Chase have once released additional multitudes of liens on loans that the Schneider Entities own.
This egregious act is, simply put, beyond outrageous.

MLPA

The actions described above are in addition to the scheme that JPMorgan and Chase have
perpetuated through the MLP A.

As we noted above, after the BS/EMC violations surfaced, JPMorgan and Chase realized that
they faced enormous liability for similar violations with respect to loans that they themselves had
originated. So, in late 2008, JPMorgan and Chase sought to "dump" loans in blighted and
devastated areas that were burdened by thousands of violations of federal, state and local
consumer protection and loan servicing laws.

Taking advantage of its long-term business relationship with the Schneider Entities, JPMorgan
and Chase fraudulently induced MRS to enter into the MLPA. The MLP A covered the sale of
over 3,500 residential RMLs in the aggregate outstanding principal amount of over $156 million.

The list of loans, that JPMorgan and Chase duplicitously delivered after luring MRS to sign the
MLPA, was purposefully denuded of the necessary information for servicing. A motivating
factor for JPMorgan and Chase in this part of their scheme was precisely the fact that the files
had been stripped of necessary information, making them unserviceable.

As described above, prior to the sale of the loans to MRS, JPMorgan and Chase had employed
their systematic use of collection agencies, which did not perform serving functions, serially to
administrate the MLPA loans. As it had done in so many other instances, this use corrupted the
integrity of the servicing files permanently.

Even as of this writing, despite innumerable requests, Chase has not supplied this information;
indeed, Chase has deliberately withheld it. In fact, representatives of Chase have brazenly stated
Chase's intent to not supply this information to the Schneider Entities, with full knowledge of the
incalculable damage such a position would cause to the Schneider Entities.

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JPMorgan Chase Bank, N .A.

March 5, 2014
Page6

Breaches of MLP A

The MLP A contains a warranty that the loans are in compliance with all federal, state and local
laws. Despite this warranty, Chase failed to comply with nearly all such laws. These include the
servicing violations described above.

Further, as noted above, the mortgage loans were defined in the MLPA as first lien mortgage
loans, though, contrary to the data tape, the vast majority of them have proven to be deficiency
claims.

In addition, Chase has not delivered allonges and assignments for many of the loans. Moreover,
Chase has continued to collect payments (on its own or through collection agencies) on many of
the sold loans without remitting the payments to MRS.

And, post-sale, Chase has continued to harm the Schneider Entities. The list of wrongs is
extensive. In part, it includes: (1) changing the list ofloans sold, and adding hundreds of loans
that violate loan servicing and consumer protection laws; (2) pulling valuable loans back after
the sale closed; (3) keeping payments made by borrowers after sale of the loans; (4) directing
enforcement agencies to MRS for Chase's violations; (5) releasing and discharging liens on sold
loans; (6) short-selling properties subject to loans sold to Schneider Entities; and (7) receiving
payments from borrowers and insurance carriers and refusing to remit such payments to MRS .

Documentation

As we noted above, the Schneider Entities have compiled a library of supporting documents.
The documents show repeated internal communications over many years, including colorful
language by representatives of JPMorgan and Chase gloating over the harm being done to the
Schneider Entities. As you can surmise, these documents have facilitated the preparation of this
letter. This documentation substantiates numerous causes of action. Each of the Schneider
Entities poised to commence them should a resolution not arise promptly.

We have attached a representative set of case studies detailing wrongs perpetrated on specific
loans. The case studies cite supporting documentation that we believe JPMorgan and Chase
themselves have. This affords you the opportunity to verify that the case studies accurately
detail but a few of the multitude of loans saddled with ·rampant violations of law.

Potential Jury Trial and Damages

To summarize, JPMorgan and Chase are engaged in an ongoing enterprise to violate laws. This
scheme has embroiled the Schneider Entities and has harmed them grievously. JPMorgan and
Chase sought, and continue to seek, to make the Schneider Entities their scapegoat. These
actions have negatively impacted the entirety of the Schneider Entities' holdings. The measure

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JPMorgan Chase Bartk, N.A.

March 5, 2014
Page 7

of damages to which JPMorgan and Chase have exposed our clients significantly exceeds the
face value of the loans owned by the Schneider Entities, and recovery on that magnitude would
not be an extraordinary verdict for a jury. There are no limitations under any contracts that
would limit such damages.

This is especially true w~en one considers the enormity of the scheme by JPMorgan and Chase
to deceive the federal and many state governments into thinking that JPMorgan and Chase were
providing meaningful relief to troubled homeowners when, in fact all they are doing is collecting
a taxpayer subsidy for having made bad loans and having·serviced them illegally. This
realization will further the conclusion that JPMorgan and Chase's wrongful conduct is not
merely intentional, but purposeful.

In addition to the library that our clients have compiled, the Schneider Entities possess unique
and vast experience in the industry that has aided in grasping the scope of this scheme. This
unique position within the industry has afforded an ample opportunity to learn and understand
the entirety of this scheme. Having an articulate witness with detailed information allowed for
us to learn the scope of this scheme with little issue, and there will be no obstacles in conveying
the same throughout litigation.

Thus, the time to settle this is short. To this end, the Schneider Entities will consider a failure to
respond by Tuesday, March 11, 2014 to be a negative response. We are prepared to discuss this
matter immediately should you be ready to implement an expeditious settlement that makes the
Schneider Entities.whole.

cc: Matthew D. Simon

Legal Department
JPMorgan Chase Bank, N.A.
4915 Independence Pkwy - FS I 2nd Floor
Tampa, Florida 33634 (by FedEx)

Stephanie Mudick
Executive V.P. Consumer Practices & Corporate Responsibility
General Counsel
JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, NY 10017 (by hand delivery)

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JPMorgan Chase Banlc, N.A.

March 5, 2014
Page8

Glenn D. Seeley
Legal Counsel
JPMorgan Chase Bank
1111 ~olaris Parkway
Columbus, OH 43240 (by FedEx)

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Case Studies re Systematic and Ongoing Abuse of Schneider Entities

as Described in Letter From Schneider Entities Dated March S, 2014
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 11 of 21

Case Studies re Systematic and Ongoing Abuse of Schneider Entities

Example 1

1st Fidelity vs. Robert W. Warwick and Lauren D. Warwick

In this matter, 1st Fidelity Loan Servicing, LLC ("t st Fidelity") was receiving regular
monthly payments from the Borrowers, Robert W. Warwick and Lauren D. Warwick
("Borrowers"), pursuant to an agreed-upon payment arrangement.

Ist Fidelity had purchased this loan from Chase Home Finance, LLC ("Chase") Home on
September 24, 2009. The loan was secured by a second mortgage. Chase executed an
assignment of the second mortgage on October 30, 2009, and the assignment was recorded by 1st
Fidelity on December 11, 2009 in the appropriate registry of deeds. Subsequently, the
Borrowers entered into a payment arrangement with I st Fidelity and were making monthly
payments. On September 13, 2012, 34 months after selling the loan to I st Fidelity, Chase sent
the Borrowers a second lien extinguishment letter purportedly notifying them that it was
cancelling a debt totaling $167,003.51 as a result of the recent mortgage servicing settlement
reached with the states and federal government. (Chase Cancellation of Debt Letter dated
September 13, 2012.)

Larry Schneider ("Schneider"), in his capacity as the primary representative of 1st

Fidelity, had repeatedly pleaded with Mr. Omar Kassem, Portfolio Manager at Chase, to issue
retraction letters to any and all Borrowers who had improperly received a cancellation of debt
letter. On October 5, 2012, Schneider notified Mr. Kassem that the Borrowers in this matter had
ceased the monthly payments they had been making to 1st Fidelity since October of2009 and
refused to communicate with 1st Fidelity as a result of the cancellation of debt letter they had
received from Chase. Further 1st Fidelity once again requested that retraction letters be sent by
Chase. (Email from Schneider to Omar Kassem dated October 5, 2012.) Despite such pleas, no
retraction letter was sent.

On December 12, 2012, 1st Fidelity received correspondence from the State of Maryland,
Department of Labor, Licensing and Regulation, Division of Financial Regulation. The
correspondence indicates that a complaint had been filed on account of Chase cancelling a debt
and requesting that I st Fidelity cease all foreclosure action until their investigation was complete.
Included was correspondence from Kristin F. Jones, Chief of Staff, Office of the Speaker of the
State House for the State of Maryland, in which Ms. Jones describes the issuance by Chase of the
cancellation of debt that was currently owned by Ist Fidelity. In that communication, Ms. Jones
states "I'm afraid based on the notification of loan transfer that Chase sold their loan some years
ago. Even so, why would Chase cancel their debt and not Fidelity. Further I question whether
Chase is somehow getting credit from a write off they never actually have to honor." (Facsimile
from the State of Maryland, Department of Labor, Licensing and Regulation, Division of
Financial Regulation; Email from Kristin F. Jones, Chief of Staff to Anne B. Norton dated
November 30, 2012.)
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Chase originally stated that 1st Fidelity was required to choose between a retraction letter
or a repurchase at a small premium and was required to make such choice within no more than 5
calendar days. 1st Fidelity elected to keep the loan and requested that Chase send out the
retraction letter. Chase refused to send the retraction letter even after making the offer. Despite
numerous requests by 1st Fidelity no retraction letter was r sent.

On January 28, 2013, Chase bought back the loan from 1st Fidelity for its full face value
due to the escalation of the Borrower's complaint.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 13 of 21

Example2

1st Fidelity vs. Saleh Ahmed and Beverly Ahmed

In this matter, 1st Fidelity was foreclosing on a property secured by a second mortgage
owned by the Borrowers, Saleh Ahmed and Beverly Ahmed ("Borrowers'').

In September of 2012, 1st Fidelity was in the process of foreclosing on a property secured
by a second mortgage that had been sold and assigned to 1st Fidelity by Chase in October of
2009. Despite this fact, Chase issued a second lien extinguishment letter to the Borrowers on
September 13, 2012, 35 months after selling the loan to 1st Fidelity. In the second lien
extinguishment letter, Chase purportedly notified them that it was cancelling a debt totaling
$42,543.97 as a result of the recent mortgage servicing settlement reached with the states and
federal government. (Chase Cancellation of Debt Letter dated September 13, 2012.)

1st Fidelity was now estopped from proceeding with the foreclosure. On October 5, 2012,
Schneider notified Mr. Kassem that the Borrowers' attorney was requiring that 151 Fidelity satisfy
the loan or the Borrowers would call the Attorney General in Oklahoma. Schneider again
requested that Chase send retraction letters immediately. Schneider pleaded with Mr. Kassem to
rectify the situation by issuing a retraction Jetter from Chase. Schneider warned Mr. Kassem that
this was a serious situation that should be immediately remedied by Chase. Despite this
warning, Mr. Kassem did not issue a retraction letter, nor did he do anything else to remedy the
situation. Instead, Mr. Kassem responded by advising Schneider that 1st Fidelity should release
its own valid lien. (Email string from Schneider to Mr. Kassem dated October 8, 2012.)

Schneider continued to plead with Mr. Kassem to send the retraction letters to I 51 Fidelity
and the other related entities his affected borrowers. On December 5, 2012, Schneider told Mr.
Kassem that he had to postpone his foreclosure sale and that the Borrowers had contacted the
Attorney General's office in Oklahoma. As a result, Schneider indicated to Mr. Kassem that
Chase should consider buying back this loan as well. (Email from Schneider to Mr. Kassem
dated December 5, 2012.)

Despite repeated requests by Schneider, to date, no action has been taken by Chase to
remedy the situation, i.e., sending a retraction letter or repurchasing the loan back from 1st
Fidelity. On February 26 2013, Mr. Kassem indicated that he could no longer work with
Schneider to resolve any issues. (Email from Mr. Kassem dated February 26, 2013.) It is
apparent from Mr. Kassem's own admission that his lack of motivation to buy back this loan was
due to the fact that Chase had not yet received any complaints on this loan. (Email from Mr.
Kassem to Schneider dated March 1, 2013.) Nevertheless, Schneider has continued to attempt to
obtain the retraction letters from Chase, but has been told that representatives of Chase are no
longer able to communicate with Schneider or I 51 Fidelity. (Email from La uni L. Solomon to
Schneider dated August 15, 2013.)

On January 31, 2014, approximately 15 months after 1st Fidelity had initially requested
assistance from Chase, 1st Fidelity received an answer to the foreclosure complaint it had filed
against the Borrowers. Chase is a co-defendant in the foreclosure action. In their Answer, the
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 14 of 21

Borrowers claim that they were no longer obligated to perform on the loan because the loan had
been forgiven by Chase pursuant to the National Mortgage Settlement Agreement, and request
that 1st Fidelity pays its fees and costs. Specifically, the Answer states that "Defendant Saleh
Ahmed asserts that the loan was included in the settlement agreement that Defendant JPMorgan
Chase had with the states and federal government, and that the loan was cancelled as to
Defendants Saleh Ahmed and Beverly Ahmed. In the alterative, Defendant Saleh Ahmed,
asserts that the loan was sold to Plaintiff at a time when JPMorgan Chase knew or should have
known that the loan may qualify under the settlement agreement and by equity should be
required to honor the cancellation of the debt as to the Defendant Saleh Ahmed and Beverly
Ahmed." (First Fidelity Loan Servicing vs. Saleh Ahmed, Beverly Ahmed et al, Case No. CJ-
2012-1367, Answer to Plaintiff's Petition dated January 9, 2014.)

To date, there is no evidence that a retraction letter has been sent. This matter remains
open as of the time of this writing.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 15 of 21

Example3

1st Fidelity vs. Teresa M. Hancock-Roberts

In this matter, 1st Fidelity was receiving regular monthly payments from the Borrower,
Teresa M. Hancock-Roberts ("Borrower;'), pursuant to an agreed upon payment arrangement.

On August 27, 2009, 1st Fidelity purchased a loan from Chase that was secured by a
second mortgage. Chase executed an assignment of the second mortgage on November 4, 2009
which was recorded on August 26, 2010 in the appropriate registry of deeds. Subsequently, the
Borrower entered into a payment arrangement with 1st Fidelity. On September 13, 2012, Chase
sent the Borrower a second lien extinguishrnent letter, 24 months after selling the loan to I st
Fidelity. In the second lien extinguishment letter, Chase purportedly notified the Borrower that it
was cancelling a debt totaling $28,209.15 as a result of the recent mortgage servicing settlement
reached with the states and federal government. (Chase Cancellation of Debt Letter dated
September 13, 2012.)

Prior to date of the debt cancellation letter, the Borrower had consistently performed on
her agreement to make monthly payments to I 51 Fidelity. As stated previously, Schneider had
repeatedly pleaded with Mr. Kassem to issue retraction letters sent to each and every one of 1st
Fidelity and its related entities affected borrowers, however no retraction letters were issued. On
February 26, 2013, Mr. Kassem informed Schneider that he could no longer work with Schneider
to resolve any issues.

On April 2, 2013, 1st Fidelity received correspondence from the Conswner Financial
Protection Bureau that a complaint had been filed by the Borrower regarding issues of loan
servicing, payments and her escrow account, and attached the cancellation of debt letter that had
been sent by Chase. The Borrower claimed that the debt had been cancelled by Chase due to the
recent mortgage servicing settlement with the states and federal governments. The Borrower
further claimed that 1st Fidelity would not honor the letter. This complaint, initially filed with
the State of Connecticut Department of Banking, was forwarded to the Federal Trade
Commission and the Connecticut Department of Banking. (Email from Tarsha Williams,
Conswner Financial Protection Bureau dated April 2, 2013 and corresponding attachments.)

On December 30, 2013, the Borrower notified 1st Fidelity that she would no longer be
making her agreed upon monthly payments She further stated that if this matter was not rectified
she would file a complaint with the Conswner Financial Protection Bureau. On February 5,
2014, the Borrower sent another email requesting an update and a refund

As stated previously, Chase representatives were instructed to not communicate in any

manner with 1st Fidelity or any related entities, thus making it impossible for this matter to be
resolved by 1st Fidelity. The matter remains open at the time of this writing.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 16 of 21

Example4

S & A vs. Steven Lossow and Deborah Lossow

In this matter, Chase improperly accepted and received payments on a short sale for a
loan that was owned by S & A Capital Partners, Inc. ("S & A") and that was secured by a second
mortgage.

S & A purchased a loan from Chase secured by a second mortgage. On August 4, 2009,
Chase executed an assignment of the second mortgage, which was recorded on November 5,
2009 in the appropriate registry of deeds. Larry Schneider ("Schneider"), in his capacity as the
primary representative of S & A had been communicating and working with the Borrowers,
Steven Lossow and Deborah Lossow ("Borrowers"). Soon thereafter the Borrowers infonned
S & A that the first lender, Chase, was foreclosing due to non-payment. Thereafter, the
Borrowers ceased communications with S & A.

Upon review of the public records, S & A discovered that the property had been sold by
the Borrowers and the Deed recorded on December 7,201 I. Thereafter, S & A's counsel
contacted the closing attorney who confinned that Chase had approved a short sale of the
property and had received and applied a payoff on both Chase's first loan and S & A's second
loan. In fact, the closing attorney's paralegal, Zelia Frias, indicted that she had contacted Chase
and that Chase informed her that the money that was wired for the transaction was "[a]pplied and
closed two accounts for the Sellers". (Facsimile from Zelia Frias, paralegal for closing attorney,
to Roberto Di Marco dated May 25, 2012 containing short sale approval letter from Janet Joh,
Chase Representative, to Borrower dated December 7, 2011.)

On May 25, 2012, Schneider contacted Janet Joh and Julio Escobedo, Ms. Joh's
supervisor, notifying them of the situation and requesting that the situation be remedied by
Chase. (Email from Schneider to Janet Joh dated May 25, 2012.) Shortly thereafter, Schneider
followed up with a telephone call to Ms. Joh. Ms. Joh told Schneider not to contact her again
and hung up on him. Schneider then left voicemail messages and emails for Mr. Escobedo,
however, he refused to respond to Schneider as well. On Monday, October 1, 2012, Schneider
reached out to Mr. Kassem to notify him of the situation and the lack of response by Chase
representatives. Mr. Kassem responded by indicating "I'm amazed both these Chase folks never
responded back. Or at least a manager." (Email string from Omar Kassem to Schneider dated
October 1, 2012.)

As stated previously, Chase representatives were instructed to not communicate in any

manner with S & A or any related entities, thus making it impossible for this matter to be
resolved by S & A. The matter remains open at the time of this writing.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 17 of 21

Examples

S & A vs. Maureen Waton-Preis

In this matter, S & A was receiving regular monthly payments from the Borrower,
Maureen Waton-Preis ("Borrower"), pursuant to a Stipulation Agreement.

On January 14, 2010, S & A acquired a loan secured by a second mortgage from Chase.
On January 25, 2010, Chase executed an assignment of the second mortgage which was recorded
on February 8, 2010 in the appropriate registry of deeds. Schneider had been working with the
Borrower concerning payment arrangements. After more than a year of negotiations with the
Borrower and subsequent legal action by S & A, S & A and the Borrower executed a Stipulation
Agreement. The Borrower had performed on the parties' Stipulation Agreement, making regular
monthly payments from January 2011 through October 2013.

However, beginning in October of 2012, the Borrower began to receive correspondence

from Real Time Resolutions ("Real Time") a debt collection agency working for Chase (Letter
from Real Time Resolutions to the Borrower dated October 19, 2012.) In that correspondence,
Real Time indicated its authority to release Chase's lien on the property for 35% of the amount
secured by the lien.

Over the next several months, the Borrower continued to receive written correspondence
from Real Time, accompanied by harassing phone calls. During this time, the substance of the
correspondence from Real Time changed several times, varying between claims that Real Time
owned the loan itself to Real Time serviced the loan for Chase. (Letters from Real Time
Resolutions to the Borrower dated March 8, 2013 and July 15, 2013.) On July 29, 2013, Real
Time, on behalf of Chase, sent a letter to the Borrower offering repayment options and stating
that the debt of $38,133.12 carries no interest rate. (Letter from Real time Resolutions to the
Borrower dated July 29, 2013.) This amount erroneously takes into account the amount of
money S & A paid for the loan years earlier as a payment toward the Borrower's debt. (Chase
ledger included in the purchase package to S & A dated January, 25, 2010.) In effect, S & A
was considered a payee of the loan, and no interest had accrued based upon Chase's "servicing"
of the loan during those intervening three years. The accrual of zero interest over more than
three years violates all mortgage servicing and consumer protection laws.

Based upon the advice of S &A, the Borrower sought to correct the issue with Chase and
Real Time. Chase and Real Time both confirmed in writing that they would research the matter.
Subsequently, Chase informed the Borrower in writing that it owned the loan and that Real Time
was the authorized agent for service. (Letter from Real time Resolutions to the Borrower dated
May 24, 2013 and dated July 10, 2013.) The Borrower then retained counsel and threatened
legal action against S & A.

Borrower's counsel received direction from Alex Winttrs, a representative of Real Time,
that the Borrower should cease all payments to S & A and demand that all payments made to
date be returned. (Letter from Borrower's counsel, Attorney Bottiglieri, to Real Time
Resolutions dated October 7, 2013.) On October 7, 2013, S & A received a letter from the
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 18 of 21

Attorney for the Borrowers claiming that S & A was violating RESPA, threatening legal action
against S & A and indicating that Real Time had directed his client to cease making payments to
any other entity. Furthermore, the letter stated that Real Time had not credited any payments to
the Borrower's account since Real Time received the mortgage from Chase, and demanded that
all payments be transferred to Chase. (Letter from Attorney Bottiglieri to S & A dated October
7, 2013.) On November 21, 2013, S & A was notified by its bank that the Borrower's November
2013 payment was revoked.

As stated previously, Chase representatives were instructed to not communicate in any

manner with S & A or any related entities, thus making it impossible for this matter to be
resolved by S & A. The matter remains open at the time of this writing.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 19 of 21

Example6

MRS vs. Vahe Kevorkyants

In this matter, it was represented to Schneider that one of the loans bought by Mortgage
Resolution Servicing, LLC ("MRS") through the MLPA was secured by a first mortgage on
property owned by Vahe Kevorkyants.

MRS purchased a loan which was included in the pool of loans sold to MRS on February
25, 2009 in connection with the MLPA. Pursuant to the data tape, this loan was secured by a
first Mortgage.

On December 17, 2009, Larry Schneider ("Schneider"), in his capacity as the primary
representative of MRS, received an email from Chase inquiring as to whether this loan was
included in the sale of loans to MRS pursuant to the MLP A. Schneider confirmed to Chase that
the loan had been sold to MRS pursuant to the MLPA, however, in attempting to service the loan
with no servicing information provided by Chase, Schneider discovered that it was a deficiency
loan due to a foreclosure, and therefore the mortgage was no longer in force and effect. A Chase
representative informed Schneider that he had sent this information to the insurance
representative and was waiting for a response. To date, no Chase representative has contacted
Schneider regarding this matter, despite Schneider's repeated follow up communications. (Email
from Larry Schneider to Launi Solomon dated October 3, 2012.) Nevertheless, on February 11,
2010, Chase executed an assignment of mortgage to MRS for a mortgage which no longer
existed.

Schneider has since discovered that Chase filed a title insurance claim with XL Insurance
America on June 27, 2008 in connection with this matter. This claim was filed by Chase 8
months prior to Chase's purported sale of the first mortgage to MRS. (Letter from Keri Ryan of
XL Insurance America to Connie L. Beaver, Chase Home Finance dated August 5, 2008.)

The letter from XL Insurance America indicates that Chase submitted a claim seeking
recovery of loss in connection with the loan. It appears that Chase understood that it was a first
lien on the property, however, because of undisclosed loans, it was actually in the third position
and had been already foreclosed on. In a communication with Schneider's counsel on February
14, 2013, a representative from XL Insurance America indicated that the insurance company had,
in fact, paid Chase for the loan in the fall of 2009. It is customary for insurance claims such as
these to pay the face value of the loan, in this case $250,000.00. In short, Chase sold a
deficiency as a first lien and then latter on collected full value on the deficiency -- and never
remitted the payment to MRS.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 20 of 21

Example 7

1st Fidelity vs. Mark R. Damstra

In this matter, 1st Fidelity commenced foreclosure proceedings on a property secured by

a first mortgage owned by the Borrower, Mark R. Damstra ("Borrower").

1st Fidelity purchased a loan from Chase which was secured by a first mortgage owned by
the Borrower. Chase executed an assignment of the mortgage to 151 Fidelity on October 22, 2010
and said assignment was recorded in the appropriate registry of deeds on November 15, 2010.

On November 21, 2011, 1st Fidelity, through counsel, sent a notice of intent to foreclose
on the aforementioned mortgage to the Borrower. Subsequently, foreclosure proceedings were
commenced by 1st Fidelity against the Borrower. The foreclosure proceedings have been
vigorously defended by the Borrower, which has delayed foreclosure and has led to escalating
legal fees and costs for 1st Fidelity.

On October 23, 2013, Chase, unbeknownst to 1s1 Fidelity, executed a discharge of the
first mortgage sold by Chase to 1st Fidelity as part of Chase's Alternative Foreclosure Process.
Said discharge was recorded in the appropriate registry of deeds on November 13, 2013 despite
Chase neither owning nor servicing the mortgage.
 Case 1:15-cv-00293-LTS-JCF Document 191-13 Filed 06/15/17 Page 21 of 21

Example8

S & A vs. Patricia B. King

In this matter, S & A was foreclosing on a property secured by a first mortgage owned by
the Borrower, Patricia B. King ("Borrower").

S & A purchased a loan from Chase which was secured by a first mortgage owned by the
Borrower. Chase executed an assignment of the mortgage to S &A on February 16, 2010 and
said assignment was recorded in the appropriate registry of deeds on March 15, 2010.

On October 25, 2013, S &A commenced foreclosure proceedings against the Borrower.

On November 6, 2013, Chase, unbeknownst to S & A, executed a discharge of the first

mortgage sold by Chase to S & A as part of Chase's Alternative Foreclosure Process. Said
discharge was recorded in the appropriate registry of deeds on November 19, 20 I 3 despite Chase
neither owning nor servicing the mortgage.