Cupertino homeowners Jeffrey and Jenifer Schulken, who originated their HELOC with WaMu, had their line suspended by Chase earlier this year when Chase claimed the couple’s finances would not allow them to make their HELOC payments.  This is despite the fact the Schulkens enjoy excellent credit scores, maintain steady incomes, always make their payments on time and even pay extra toward the principal.  The Schulkens responded by filing a lawsuit seeking class action status on behalf of all Chase customers who have had their HELOCs suspended or reduced unlawfully.

Chase responded by filing a motion to dismiss that argued it had no responsibility to former WaMu borrowers.  According to Chase, although it purchased WaMu’s assets, it supposedly did not acquire any liability—even for its own misconduct.  “Chase’s unprecedented position was fairly simple:  Chase can harm former WaMu customers with impunity, and anyone who suffers damages should have to go sue the F.D.I.C.,” says the Schulkens’ attorney Jay Edelson, whose law firm, KamberEdelson LLC, has filed similar class actions against Chase, WaMu, Wells Fargo and Citibank.  As Edelson explains, “Under Chase’s reasoning, it could seize former WaMu borrowers’ homes by force and throw people out on the street, and the only recourse would be for the former WaMu customers to sue the F.D.I.C.  The court saw through Chase’s arrogant– and frankly scary – position.”  

Chase purchased WaMu from the F.D.I.C. in September 2008 for $1.9 billion.  Through creative “purchase accounting,” experts have forecast that Chase will realize a $29 billion windfall as a result of the acquisition.

“Its have your cake and $29 billion too,” continued Edelson.  “Chase was supposed to use the bailout money to lend to consumers—not to freeze up credit lines.  More than anything, it shows that Chase’s attitude is that no matter how poorly it behaves, the government should be on the hook for its improper acts.  Its as if the bailout taught it nothing.”

Edelson had called upon Congress to act, a movement that is gaining significant support.  “Call your Congressman and ask them where the bailout money went.  It isn’t being used to get credit flowing, that’s for sure.”

Edelson is joined in the suit by KamberEdelson (http://www.kamberedelson.com) attorneys Evan Meyers, Steven Lezell and Irina Slavina.

About KamberEdelson:  Jay Edelson testified before the U.S. Senate in 2008 in connection with the contaminated pet food recall, in which his law firm was lead counsel and achieved a result in a settlement of over $24 million. He has a reputation for bringing and winning high profile class action lawsuits.  Just last year, Edelson settled a nationwide case involving lead paint contamination with Thomas the Tank Engine & Friends Wooden Railway children’s toys that was valued at over $30 million.

Media Contacts:
Glenn Selig
PR Firm: The Publicity Agency
(813) 708-1220 x 7777 Cell: (813) 300-5454
Email:  glenn@thepublicityagency.com (BlackBerry)

Justin Herndon
PR Firm: The Publicity Agency
(813) 708-1220 x 7778 Cell: (813) 528-6815
Email: justin@thepublicityagency.com (BlackBerry)