JPMorgan Chase sued for cutting home equity lines

JPMorgan Chase Bank NA was sued by an Illinois man claiming that the lender used automated and inaccurate valuation methods to reduce the home-equity lines of U.S. consumers.

Methods used by the bank and the now-shuttered Washington Mutual Bank, whose branch network JPMorgan acquired last year, violated federal lending laws, Zion resident Pascal Majon said in a complaint filed today in U.S. District Court in Chicago.

The banks' home-equity credit line reductions "are not only fraudulent, they are patently unconscionable," according to Majon's complaint. The cuts stemmed from the lenders' intent to insulate themselves from losses caused by declining U.S. housing values last year, Majon said.

JPMorgan Chase Bank is a unit of New York-based JPMorgan Chase & Co., the second-largest U.S. bank and the country's biggest credit-card lender. Tom Kelly, JPMorgan's Chicago-based spokesman, declined to comment on the lawsuit.

Majon seeks class-action, or group, status on behalf of other home-equity borrowers and unspecified money damages. The case was filed by law firm KamberEdelson LLC.

The firm, which has offices in New York and Chicago, filed a similar suit yesterday against Wells Fargo Bank NA. Kevin Waetke, a spokesman for the unit of San Francisco-based Wells Fargo & Co., didn't immediately return a call seeking comment.

The case is Majon v. Washington Mutual Bank, 09cv5118, U.S. District Court, Northern District of Illinois (Chicago). Yesterday's filing in the same court was Hickman v. Wells Fargo Bank NA, 09cv5090.