top of page

Chase "Piggyback Loan" Deficiency Collection Class Action

Velline v. JPMorgan Chase Bank, N.A.

United States District Court Northern District of California 

Case No. 3:14-cv-0916-JD

Mr. Levy is cocounseling a second mortgage anti-deficiency Class Action against JPMorgan Chase Bank with Housing and Economic Rights Advocates (HERA) in the federal District Court in San Francisco.  This class action challenges Chase’s collection of loan balances on “piggyback” second mortgages after foreclosures, and Chase’s post-foreclosure credit reporting of these balances.


California’s “anti-deficiency” law says that after a foreclosure, the lender cannot recover any deficiency balance from the borrower on a “piggy back” second mortgage, that was issued at the same time as a first mortgage.  Despite the bar on post foreclosure deficiency liability, Chase has pursued borrowers personally to collect deficiencies on “piggy back” mortgages after foreclosures.  


This Class Action challenges Chase's collection and credit reporting practices on second piggyback mortgages.  The Court has temporarily stayed this case pending a ruling on the Kuns appeal before the Ninth Circuit Court of Appeal.  The issue in Kuns is the accuracy and completeness of credit reporting of mortgages for which the California anti-deficiency laws protect the borrower against personal liability – i.e. the loans are non-recourse.  Levy and HERA have filed an Amicus Brief in the Kuns appeal, arguing that to be accurate and complete, a lender's credit reporting of deficiencies needs to reflect that the borrower has no personal liability to pay the debt. 

bottom of page