Case No. 17-7003 United States Court of Appeals For The District of Columbia

USCA Case #17-7003 Document #1713328 Filed: 01/17/2018 Page 1 of 21
Case No. 17-7003
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA
UNITED STATES et al.,

ex rel. LAURENCE SCHNEIDER
Appellant, Relator,
vs.
J.P. MORGAN CHASE BANK, N.A., et al.
Appellees.
On Appeal from a Final Order of the

U.S. District Court for the District of Columbia
(U.S. District Judge Rosemary M. Collyer)
Civil Action No. 14-1047 (RMC)
PETITION FOR REHEARING AND REHEARING EN BANC
Joseph A. Black
Robert L. Di Marco Daniel E. Cohen
WALKER & DI MARCO, P.C. THE CULLEN LAW FIRM, PLLC
350 Main Street, First Floor 1101 30th Street NW, Suite 300
Malden, MA 02148 Washington, D.C. 20007
Tel: (781) 322-3700 Tel: (202) 944-8600
Fax: (781) 322-3757 Fax: (202 944-8611
January 17, 2018 Counsel for Appellant

TABLE OF CONTENTS
INTRODUCTION .....................................................................................................1
RULE 35(b)(1) STATEMENT ..................................................................................1
I. The Panel Improperly Based Its Decision on Facts

Falsely Asserted by Chase. ..................................................................................2
II. Chase Incurred an Obligation to Pay Money to the Government for Failure
to Modify Loans According to the Terms of the Consent Judgment. ...............12
III. The Court Should Have Permitted Schneider to File an Amended

Complaint Rather Than Affirming on Alternative Grounds.. ...........................14
CONCLUSION ........................................................................................................16
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
i
TABLE OF AUTHORITIES
Cases
Barr v. Clinton,
370 F.3d 1196, 1199 (D.C. Cir. 2004) ....................................................................5
District of Columbia v. Air Florida, Inc.,

750 F.2d 1077 (D.C. Cir. 1984) ............................................................................16
Firestone v. Firestone,
76 F.3d 1205 (D.C. Cir. 1996) ..............................................................................17
Kowal v. MCI Commc’ns Corp.,

16 F.3d 1271 (D.C. Cir. 1994) ................................................................................4
Momenian v. Davidson,
__ F.3d __, 2017 WL 6629027 *7 (D.C. Cir. Dec. 29, 2017) ..............................15
Pencheng Si v.Laogai Research Found.,

No. 09-2388, 2013 WL 4478953 (D.D.C. Aug. 21, 2013) ...................................17
United States v. Bank of America,

No. 12-361(D.D.C. Mar. 18, 2014) ......................................................................14
Statutes
19 U.S.C. § 3129(a)(1)(G) .......................................................................................16
ii
INTRODUCTION
Plaintiff/Relator Laurence Schneider petitions this Court for rehearing and
rehearing en banc of its decision in United States ex rel. Schneider v. JP Morgan
Chase Bank, NA, No 17-7003 (Doc. 1710165 Dec. 22, 2017), ADD 1-11, regarding
Count 1 of his Second Amended Complaint related to Chase’s false claims made in
its performance of the National Mortgage Settlement Agreement (“NMS,”
“Settlement,” or “Consent Judgment”).
The basis for the Petition for rehearing is that the Panel relied on facts
outside of the complaint, which were asserted by Chase. These facts are not
present in the record and, more importantly, are simply not true. Most of these
facts relate to what the court-appointed Monitor of the NMS knew about Chase’s
modification and crediting practices. A full review of the record demonstrates
clearly and unequivocally that the facts asserted by Chase and taken as true by the
Panel are false.
RULE 35(b)(1) STATEMENT
The basis for the Petition for rehearing en banc is that the Panel violated the
rule that on a motion to dismiss district courts and courts of appeal are required to
“construe [the complaint] liberally in the plaintiffs’ favor, and [] grant plaintiffs the
benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI
Commc’ns Corp. 16 F.3d 1271, 1276. (D.C. Cir. 1994). See also Barr v. Clinton,
1
370 F.3d 1196, 1199 (D.C. Cir. 2004). Instead, the Panel relied on Chase’s
characterization of the factual allegations contained in the complaint,
characterizations that were false.
Further, to the extent that the Panel found the complaint deficient in pleading
fraud, it should have permitted the plaintiff to amend his complaint to resolve any
ambiguities.
I. The Panel Improperly Based Its Decision on Facts Falsely

Asserted by Chase.
The primary factual errors and presumptions that the Panel relies on are
contained in the following paragraphs:
Appellant ultimately only challenges the Monitor’s legal determination

that Chase complied with the Settlement. Although Schneider’s
original complaint included a number of allegedly false statements by
Chase to the Monitor – which might have been problematic – his
amended complaint dropped all of those claims. So even assuming that
false or deceptive statements could serve as the basis of a False Claims
Act suit outside the scope of contract dispute procedures, such
allegations are not before us.
In that regard, Appellant’s claim that Chase violated the consumer relief
provisions of the Settlement is largely predicated on the notion that the
banks were obliged to conduct an application process in order to
determine who was entitled to receive consumer relief, whereas Chase
made that decision unilaterally. But the Settlement does not require any
application process in its otherwise-detailed guidelines for granting
consumer relief. Indeed, such a reading would place all of Chase’s
fellow lenders in noncompliance with the Settlement, since none of the
other parties used the type of application process that Relator suggests
was necessary. Be that as it may, the decisive point is that the Monitor
2
was aware of the practices and concluded that Chase was in

compliance. And to the extent that Relator vaguely alleges that Chase
sought credit for loans that otherwise did not qualify for relief under the
Settlement, the complaint nowhere identifies any ineligible loan Chase
submitted for credit, alleges that the Monitor was unaware of any such
loan’s disqualifying characteristics, or claims that the cumulative value
of any such loans exceeded the $250 million buffer we discussed above.
Slip op. at 8-9, ADD 8-9.
• The Panel’s premise that Schneider is challenging the “Monitor’s
legal determination that Chase complied with the Settlement” is erroneous. His
fundamental allegation is that Chase submitted false claims of compliance with the
terms of the Consent Judgment. Comp. ¶¶ 298-310 JA 93-94. The Monitor’s
determinations were factually erroneous because Chase lied to him, which allowed
Chase to avoid paying money to the government for its failures to comply with the
requirements of the Settlement. That is the essence of Schneider’s complaint.
We note that the Department of Justice has a similar view of Schneider’s
action against Chase: It stated in its Rule 28(j) letter:
We are now authorized to state that there are serious questions about
the theory underlying Chase’s argument. Although some of relator’s
factual allegations would establish noncompliance with the agreed-to
terms of the consent judgment, that agreement is also the backdrop of
an alleged fraud. The monitor’s historical conduct may be relevant to
the ultimate merits of relator’s FCA case.
Case. No 17-7003, Doc. No. 1704528 at 1 (11/15/2017).
3
As the government notes, Schneider is challenging Chase’s noncompliance
with the terms of the agreement– not the Monitor’s legal determinations.
Nevertheless, those determinations were necessarily defective because they were
based on Chase’s false claims of compliance with the Settlement.
• Chase was required to obtain information from borrowers to
determine whether their loans qualified for modifications according to the terms set
out in Exhibit D of the Settlement. Consent Judgment, Ex. D ¶¶ 1-8, ADD 19-26.
Schneider was personally affected by Chase’s fraud against the government. 2nd
Amend. Compl. ¶¶ 12-16, JA 30-32. As a result, Schneider filed a separate action
in the U.S. District Court for the Southern District of New York, Mortgage
Resolution Servicing, LLC, et al. v. JPMorgan Chase Bank, N.A., et al. 1:15-cv-
00293-LTS (SDNY Dec. 24, 2014). Discovery in Schneider’s SDNY case
included a deposition of the Monitor. In his deposition the Monitor consistently
characterized the procedure by which Chase was required to obtain information
from the borrower as an “application process.” The following are portions of that
deposition:
p.60
10· · Q.· · Were there instances in which a lien release
11 was considered a modification?
12· · · · ·A.· · My recollection is that modifications were
13· ·generally done as to first lien loans, and that a
14· ·modification generally did not release a lien, it
4
15· ·merely reduced the principal amount of and/or extended

16· ·the time of payment.
17· · · · ·Q.· · So you're not -- go ahead, I'm sorry.
18· · · · ·A.· · I will say, in addition, there were
19· ·situations where if -- if there was a first and second
20· ·lien loan, there were times when it was required to
21· ·modify both to give the borrower relief in terms of
22· ·payment burden.
23· · · · ·Q.· · And how would they achieve that, through
24· ·an application process?
25· · A.· · In general, yes.· Although, again,
p.61
1· ·I -- yes.
2 Q. Were there instances where an application
3 process was not used.
4 A. I don’t know. I don’t recall.
* * *
p.97
10 Q. Towards the bottom of the page highlighted
11 there for you, sir, there's a statement which states
12 in effect, I'm paraphrasing, that until the lien is
13 released, the requirements of there being a single
14 point of contact is still necessary. Is that your
15 understanding as well?
16 MR. PISTILLI: Objection --
17 THE WITNESS: No, that's what this --
18 MR. PISTILLI: Pardon me -- objection,
19 lacks foundation and calls for a legal
20 conclusion.
21 THE WITNESS: That's what this says.
22 BY MR. TANTILLO:
23 Q. Was that the -- was that the law or was
24 that the provision of the National Mortgage
5
25 Settlement, was that the -- was the National Mortgage
p.98
·1· ·Settlement required?
·2· · A.· · It required a single point of contact
·3· ·for -- at the very least, for applications for loan
·4· ·modification. And I don't have it here in front of
·5· ·me, obviously, but it may have well gone beyond that.
·6· ·This also does -- yeah -- yes.· So the short answer,
·7· ·yes.
·8· · Q.· · So for loans that -- but you said that for
·9· ·loans that needed to be modified or -- was there an
10· ·application necessary for that?
11· · A.· · Well, no, it did -- it required -- and,
12· ·again, it's been a while since I've read through the
13· ·SPOC provisions, single point of contact, but the –
14· ·the settlement required the availability of a single
15· ·point of contact.· It was mainly, again, in the
16· ·context of the application for relief.
* * *
p.109
3· · Q.· · So there was no determination on your part
4· ·whether or not a borrower even wanted consumer -- even
5· ·wanted to have their mortgage modified?
6· ·MR. PISTILLI: Object to the form.
7· ·THE WITNESS: Well, if a mortgage --
8· ·again, there were various forms of consumer
9· ·relief. If the form of relief you're talking
10· about is mortgage loan modification, change of
11· the payment terms, we did always have in the --
12· in our review if not -- yes, if not an
13· application, an agreement under which the
14· modification was to be given.· It varied by
6
15· servicer.· And we did have to determine for some

16· forms of relief that the house was
17· owner-occupied, and there were times we did;
18· times we didn't.
19· But if we did, we had to -- we had
20· documentation that the -- the relief had been
21· sought -- or the relief had been grounded based
22· on documentation that showed that it was -- the
23· loan was qualified for whatever the relief we're
24· talking about was.
Deposition of Joseph Smith, Monitor of NMS, Feb. 9, 2017, Filed in Mortgage
Resolution Servicing v. JP Morgan Chase, No. 1:15-cv-00293-LTR_RWL, ECF
166-1 (emphasis added), ADD 31-39.
Based on these excerpts from the Monitor’s deposition, it is clear that he
believed that Chase was obtaining information regarding the borrowers through
some form of an application process, which was required by the terms of the
Settlement. Thus, Chase’s argument that no “application process” was required in
the performance of the Consent Judgment was false. The Panel’s reliance on that
argument led it to commit error.
• As set out in the complaint (¶¶ 74, 106-115, JA 45-47, 54, 55) the
requirement for an “application process” is contained in the HAMP, which is
incorporated into the Consent Judgment in several places. See Consent Judgment
Ex A § IX.A.I., ADD 16, and Ex. D § 11, ADD 30. When the Monitor was
questioned about the effect of § 11 of Exhibit D of the Consent Judgment, he

7
stated:
13· This provision deals with -- applicable

14· requirements means requirements of -- from
15 ·outside the settlement that could toll or limit
16 compliance with the settlement's terms.· So,
17· yeah, if there was a conflict between the
18· requirements of the settlement and the law
19· referred to in this paragraph, this law
20· prevailed. And we were required -- authorized,
21· certainly, and probably required to amend our
22· protocols in order to comply with the other --
23· with the other law.
Smith Depo. 103:13-23, ADD 39.
The Service Participation Agreement referenced in Exhibit D § 11, Comp. ¶
2 JA 27, incorporates the HAMP, which specifies an application process.
Therefore, the Monitor acknowledged that Chase had to comply with requirements
of the HAMP when it sought credits for loan modification.
• On February 22, 2012, the Department of the Treasury issued a
Treasury Note entitled: “HAMP’s Role in the Settlement.” Treasury asked the
question: “why not exempt settlement-related modifications from HAMP
altogether?” Treasury answered:
Servicers no doubt would have preferred this alternative. It would have

freed them from HAMP’s extensive compliance regime, reporting
requirements, and borrower-protection features. For example, HAMP
requires servicers to evaluate borrowers first for HAMP and then for all
other alternative forms of assistance before proceeding to
foreclosure. Unless we could be certain that all borrowers would be
8
adequately protected by such an exemption, this did not make sense.
https://www.treasury.gov/connect/blog/Pages/HAMPs-Role-in-the-
Settlement.aspx, ADD 40.
This Note confirms, with no room for equivocation, that servicers such as Chase
were required to follow HAMP requirements, which included an application
process, before taking credits for loan modifications.
• The statement speculating “Chase’s fellow lenders [would be] in
noncompliance with the Settlement, since none of the other parties used the type of
application process that Relator suggests was necessary” is based on an
unsupported assertion contained in Chase’s response brief. Chase Br. at 51. Even
at the stage of summary judgment, this assertion would have to be rejected because
it is not supported by affidavits or anything in the record. There is nothing in the
complaint that would permit such speculation. Moreover, as demonstrated by the
Monitor’s deposition, he in fact believed that all the servicers, including Chase,
were following an application process to determine which loans were eligible for
modification and crediting. Without any form of comment by the other servicers
and parties to the Settlement, the assertion that “fellow lenders” were also acting
without applications is an unsupported “guess.”
• Perhaps the most egregious error contained in the Panel’s decision is
the statement: “the decisive point is that the Monitor was aware of the practices
9
and concluded that Chase was in compliance.” Slip op, at 9, ADD 9. This
statement appears to be based on the same discussion in Chase’s brief concerning
the “application process,” as well as the same unsupported assertion that the
Monitor was aware of Chase’s and the other servicers’ practices. Again, this
statement is belied by the Monitor’s numerous statements in his deposition
discussing an application process, which he assumed the servicers were following.
It is quite clear that the Monitor did not know that Chase was not obtaining
information from the borrowers to determine that their loans qualified for
modification and crediting.
It is also possible that the Panel’s statement that the Monitor knew of
Chase’s practices is based on Chase’s false assertion in its opposition brief that the
Monitor knew about Chase’s servicing practices regarding RCV1. Chase Br. at 11.
Again, the Monitor’s deposition is dispositive. He stated that “Grant Thorton (sic)
had determined that Recovery 1 loans were not being included in populations for
metrics testing.” Smith Depo. 34:17-19, ADD 34. This occurred in October 2013.
Thus, for the 18 month period from the beginning of the Consent Judgment in
April 2012 until October 2013 the Monitor and his professional consultants were
not aware that the RCV1loans were included in the population for metrics testing.
Further, when the Monitor was asked whether he knew that loans in RCV1 were
being serviced he explicitly stated: “your question is about did I know they weren't
10
being serviced, and the answer is I didn't know that.” Smith Depo. 70:14-16, ADD
36. Obviously, there was much about Chase’s practices, which violated the
Consent Judgment, that the Monitor did not know.
• The Panel’s statement that “the complaint nowhere identifies any
ineligible loan Chase submitted for credit” appears to suggest that Schneider failed
to meet the particularity requirements of Rule 9(b). However, since Chase did not
make this argument, it cannot be a basis for dismissal. The principal thrust of the
complaint is that Chase failed to obtain information from the borrowers that would
give it the information to determine if a specific loan qualified for modification and
crediting. Since it failed to follow the requirements of the Consent Judgment, all
of its certifications of compliance were false claims. Those false claims were
identified in the complaint at ¶¶ 298-310, JA 93-94.
• Finally, the Panel seems to find some significance in the fact that
Chase received credits of $250 million in excess of its total requirement. This fact
fails to recognize that Chase’s fraud likely exceeded $250 million. If the damages
were just confined to the 2nd lien credits, which equaled $308 million, Monitor’s
Final Consumer Relief Report Regarding Defendant J.P. Morgan Chase Bank,
N.A. [ECF 143] at 22, United States v. Bank of Am., No. 12-361(D.D.C. Mar. 18,
2014), there still would be over $50 million in damages just in 2nd liens. Since the
amount of damages is a factual issue, it cannot be decided on a motion to dismiss

11
without development of the record.
Based on the testimony of the Monitor in his deposition, Chase’s argument
that the Monitor was completely aware of Chase’s practices is completely bogus.
Moreover, the Panel’s conclusion that the Settlement did not require an
“application process” is obviously in error given his testimony that he expected
Chase was following such a practice. If there is any doubt about the interplay
between the Settlement, the Servicer Participation Agreement and the HAMP, the
Panel should have declined to affirm on alternative grounds. As noted by this
Court recently, when the terms of a contract “are confusing, somewhat
contradictory, and sufficiently unclear [] we find it appropriate for the District
Court to consider the alternative grounds for dismissal in the first instance.”
Momenian v. Davidson,__ F.3d __, 2017 WL 6629027 *7 (D.C. Cir. Dec. 29,
2017).
II. Chase Incurred an Obligation to Pay Money to the Government

for Failure to Modify Loans According to the Terms of the
Consent Judgment.
In its discussion of the reverse false claims provision of the FCA the Panel
focuses on the servicing allegations related to Exhibit A of the Consent Judgment
and not on the crediting allegations related to Exhibit D. While there is some
authority for dismissing the servicing allegations, because the Monitor may have
had some discretion in assessing the penalties set out in the Consent Judgment
12
(although there is still a factual issue as to whether the Monitor had full knowledge
when he took action), the same is not true for the crediting payments. Exhibit D of
the Consent Judgment states:
If Servicer fails to meet the commitment set forth in these Consumer

Relief Requirements within three years of the Servicer’s Start Date,
Servicer shall pay an amount equal to 125% of the unmet commitment
amount, except that if Servicer fails to meet the two year commitment
noted above, and then fails to meet the three year commitment, the
Servicer shall pay an amount equal to 140% of the unmet three-year
Commitment amount.
Exhibit D, ¶10.d. at D-11 (emphasis added) ADD 29.
The question is whether this language creates a fixed “obligation” to pay
money if Chase fails to meet its commitment under the Consent Judgment.
Obviously, the words “shall pay” create such an obligation, which the Monitor
does not have the discretion to forgive. Therefore, it represents an obligation that
is actionable under 19 U.S.C. § 3129(a)(1)(G). If such language does not create an
obligation under the False Claims Act, it would be difficult to imagine under what
circumstances an obligation could exist.
Moreover, as the Panel recognized, Chase did not raise the issue of whether
the crediting provisions of Exhibit D created the potential for a reverse false claim
in the district court, nor in this court, in any of its briefs. Slip op. at 10. Therefore,
under this Court’s strict rule concerning arguments made on appeal for the first
13
time, this argument should be rejected. District of Columbia v. Air Florida, Inc.,
750 F.2d 1077 (D.C. Cir. 1984) (“Decisions in this Circuit have consistently
followed a practice of [rejecting arguments] not asserted in the trial court.”).
III. The Court Should Have Permitted Schneider to File an Amended

Complaint Rather Than Affirming on Alternative Grounds.
As noted by the district court “‘[T]he D.C. Circuit has cautioned that ‘failure
to plead fraud with particularity . . . does not support a dismissal with prejudice; to
the contrary, leave to amend is almost always allowed to cure deficiencies in
pleading fraud.’ citing Pencheng Si v.Laogai Research Found., No. 09-2388, 2013
WL 4478953, at *2 (D.D.C. Aug. 21, 2013) (quoting Firestone v. Firestone, 76
F.3d 1205, 1209 (D.C. Cir. 1996)).” Based on this authority, the district court
permitted the filing of an amended complaint on Schneider’s HAMP claims, but
refused to permit an amendment on his NMS claims because such an amendment
would have been futile given the court’s rationale for dismissal. Since that
rationale has been rejected by this Court, such an amendment would no longer be
futile.
If Schneider were permitted to file an amended complaint, it would contain
the following additional allegations:
14
• Internal audit reports specifically state that servicing practices related to
RCV1 did not meet banking regulations; therefore, any certifications that
Chase was in compliance with banking regulations were false;
• Chase has no documentation to demonstrate that the loans that it modified
were eligible for crediting;
• The Monitor did not know about Chase’s servicing practices regarding
RCV1;
• The Monitor did not know that RCV1 loans were not being serviced;
• The Monitor did not know that RCV1 loans were not included in the metrics
testing population until October 2013;
• The Monitor stated that there was an application process to determine if
loans qualified for modification and credits;
• Chase could not service loans in RCV1;
• Chase could not modify loans in RCV1;
• Chase was not capable of determining which houses with loans in the RCV1
data base were occupied;
• When Chase released a liens on loans that it took for credit it did not release
the debt. Chase still pursued the debt even though the lien was released and
after it took credit for the release of the loan under the NMS.
15
Each of these allegations is fully supported by documentary and testimonial
evidence. Assuming that these additional allegations are true, as any court must at
the motion to dismiss stage, they, together with the existing complaint, clearly
demonstrate that Chase’s claims of compliance with the requirements of the
Settlement were false. Therefore, if the Court believes that Petitioner’s complaint
is in any way defective, it should permit him to amend his complaint with these
new allegations.
CONCLUSION
For the foregoing reasons, Petitioner Laurence Schneider requests that this
Court grant his Petition for Rehearing and Rehearing En Banc.
Dated: January 17, 2018 Respectfully submitted,
/s/ Joseph A. Black

JOSEPH A. BLACK
DANIEL E. COHEN
The Cullen Law Firm, PLLC
1101 30th Street NW, Suite 300
Washington, DC 20007
Tel: (202) 944-8600
ROBERT L. DI MARCO
WALKER & DI MARCO, P.C.
350 Main Street, First Floor
Malden, MA 02148
Tel: (781) 322-3700
Fax: (781) 322-3757
Counsel for Appellant

16
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME

LIMITATION
This brief complies with the type-volume limitation of Fed. R. App. P.
325(b)(2)(A) in that the brief contains 3,631 words excluding those parts exempted
by Fed. R. App. P. 32(f)
Dated: January 17, 2018 /s/ Joseph A. Black

Joseph A. Black
17
CERTIFICATE OF SERVICE
I hereby certify that on this 17th day of January, 2018 an electronic copy
of Petition for Rehearing and Rehearing En Banc, was served via CM/ECF system
to all parties of record.
Dated: January 17, 2018 /s/ Joseph A. Black

JOSEPH A. BLACK
The Cullen Law Firm, PLLC
1101 30th Street NW, Suite 300
Washington, DC 20007
Tel: (202) 944-8600
Fax: (202) 944-8611
18

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USCA Case #17-7003 Document #1713328 Filed: 01/17/2018 Page 1 of 21

Case No. 17-7003

UNITED STATES COURT OF APPEALS

UNITED STATES et al.,

J.P. MORGAN CHASE BANK, N.A., et al.

On Appeal from a Final Order of the

Civil Action No. 14-1047 (RMC)

PETITION FOR REHEARING AND REHEARING EN BANC

January 17, 2018 Counsel for Appellant

RULE 35(b)(1) STATEMENT ..................................................................................1

I. The Panel Improperly Based Its Decision on Facts

III. The Court Should Have Permitted Schneider to File an Amended

District of Columbia v. Air Florida, Inc.,

Kowal v. MCI Commc’ns Corp.,

Pencheng Si v.Laogai Research Found.,

United States v. Bank of America,

Plaintiff/Relator Laurence Schneider petitions this Court for rehearing and

rehearing en banc of its decision in United States ex rel. Schneider v. JP Morgan

its performance of the National Mortgage Settlement Agreement (“NMS,”

“Settlement,” or “Consent Judgment”).

modification and crediting practices. A full review of the record demonstrates

Panel are false.

RULE 35(b)(1) STATEMENT

characterization of the factual allegations contained in the complaint,

characterizations that were false.

I. The Panel Improperly Based Its Decision on Facts Falsely

contained in the following paragraphs:

Appellant ultimately only challenges the Monitor’s legal determination

was aware of the practices and concluded that Chase was in

Slip op. at 8-9, ADD 8-9.

• The Panel’s premise that Schneider is challenging the “Monitor’s

terms of the Consent Judgment. Comp. ¶¶ 298-310 JA 93-94. The Monitor’s

requirements of the Settlement. That is the essence of Schneider’s complaint.

We note that the Department of Justice has a similar view of Schneider’s

action against Chase: It stated in its Rule 28(j) letter:

Case. No 17-7003, Doc. No. 1704528 at 1 (11/15/2017).

As the government notes, Schneider is challenging Chase’s noncompliance

Nevertheless, those determinations were necessarily defective because they were

based on Chase’s false claims of compliance with the Settlement.

• Chase was required to obtain information from borrowers to

Amend. Compl. ¶¶ 12-16, JA 30-32. As a result, Schneider filed a separate action

00293-LTS (SDNY Dec. 24, 2014). Discovery in Schneider’s SDNY case

included a deposition of the Monitor. In his deposition the Monitor consistently

characterized the procedure by which Chase was required to obtain information

15· ·merely reduced the principal amount of and/or extended

25 Settlement, was that the -- was the National Mortgage

15· servicer.· And we did have to determine for some

Deposition of Joseph Smith, Monitor of NMS, Feb. 9, 2017, Filed in Mortgage

Resolution Servicing v. JP Morgan Chase, No. 1:15-cv-00293-LTR_RWL, ECF

166-1 (emphasis added), ADD 31-39.

Based on these excerpts from the Monitor’s deposition, it is clear that he

Settlement. Thus, Chase’s argument that no “application process” was required in

argument led it to commit error.

requirement for an “application process” is contained in the HAMP, which is

questioned about the effect of § 11 of Exhibit D of the Consent Judgment, he

13· This provision deals with -- applicable

Smith Depo. 103:13-23, ADD 39.

The Service Participation Agreement referenced in Exhibit D § 11, Comp. ¶

2 JA 27, incorporates the HAMP, which specifies an application process.

of the HAMP when it sought credits for loan modification.

• On February 22, 2012, the Department of the Treasury issued a

question: “why not exempt settlement-related modifications from HAMP

altogether?” Treasury answered: