Belzak Matter 10-23963 Doc 159 Monitor's 4th Report As To JPMC

UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION – BAY CITY
In re:
Case No. 10-23963-dob
DAVID S. BELZAK,
LYNDA J. BELZAK, Chapter 13
Debtors. Hon. Daniel S. Opperman

________________________________/
DECLARATION OF AMY WALSH IN SUPPORT OF THE FOURTH REPORT

BY THE INDEPENDENT REVIEWER PURSUANT TO THE ORDER APPROVING
SETTLEMENT BETWEEN THE UNITED STATES TRUSTEE PROGRAM
AND JPMORGAN CHASE BANK, N.A.
I, Amy Walsh, Esq., declare as follows:

1. I am a member in good standing of the Bar of the State of New York and a
Partner with the law firm Orrick, Herrington & Sutcliffe, LLP, located at 51 West
52nd Street, New York, New York 10019. I am the Independent Reviewer
appointed pursuant to the Order Approving Settlement Between the United States
Trustee Program and JPMorgan Chase Bank, N.A. (the “Order”) filed by this
Court on March 9, 2015 in connection with the above-captioned matter.
2. I submit this declaration and the Fourth Report by the Independent Reviewer in
compliance with my obligations under the Order.
3. Accordingly, attached to this declaration is a true and correct copy of the Fourth
Report by the Independent Reviewer with accompanying Exhibits A and B.
I declare under penalty of perjury that the foregoing representations are true and correct
to the best of my knowledge.
Dated: January 31, 2018

New York, New York
_____________________________
Amy Walsh
10-23963-dob Doc 159 Filed 01/31/18 Entered 01/31/18 13:41:55 Page 1 of 1

Chase Independent Review
Fourth Report by the Independent Reviewer

JPMorgan Chase Bank, N.A., Bankruptcy Settlement
Amy Walsh
Independent Reviewer
January 31, 2018
10-23963-dob Doc 159-1 Filed 01/31/18 Entered 01/31/18 13:41:55 Page 1 of 27

TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................................................................. 1
II. SUMMARY OF PRIOR REPORTS ..................................................................................................................... 2
III. CURRENT REPORTING PERIOD TEST RESULTS ............................................................................................... 2
A. Chase’s Representations Concerning the Numbers of Improperly Filed PCNs and Delayed
Escrow Analyses (Settlement Agreement Paragraphs 30 and 60) .................................................. 3
Overview of Paragraphs 30 and 60 ................................................................................................. 3
Identification of the Testing Populations for Paragraphs 30 and 60 .............................................. 5
BRG Testing of Subparagraphs 30(a)-(g) ......................................................................................... 5
Independent Reviewer’s Testing of Subparagraphs 30(a)-(g) ......................................................... 7
BRG Testing of Paragraph 60 .......................................................................................................... 9
Independent Reviewer Testing of Paragraph 60 ........................................................................... 10
B. Chase’s Representations Concerning its Employees’ Review and Verification of Data
Contained in the Incorrectly Signed PCNs Prior to Filing (Settlement Agreement
Subparagraph 92(a)) ..................................................................................................................... 11
Overview of Subparagraphs 92(a) ................................................................................................. 11
Setting the Testing Parameters for Subparagraph 92(a) .............................................................. 11
BRG Testing of Subparagraph 92(a) .............................................................................................. 11
Independent Reviewer’s Testing of Subparagraph 92(a) .............................................................. 13
C. Validation of Motion for Relief from Stay Practices (Paragraphs 47-49 and 53) .......................... 15
Overview of Paragraphs 47-49 and 53 .......................................................................................... 15
Identification of the Testing Population for Paragraphs 47-49 and 53 ......................................... 16
BRG Testing of Paragraphs 47-49 and 53 ...................................................................................... 16
Independent Reviewer’s Testing of Paragraphs 47-49 and 53 ..................................................... 17
D. Absence of Escrow Overlay in Post-Petition Escrow Analyses (Subparagraph 92(k)) ................... 19
Overview of Subparagraph 92(k) .................................................................................................. 19
Identification of the Testing Population for Subparagraph 92(k) ................................................. 19
BRG Testing of Subparagraph 92(k) .............................................................................................. 20
Independent Reviewer’s Testing of Subparagraph 92(k) .............................................................. 21
E. Additional Test Results Submitted During the Current Testing Period ......................................... 21
F. Modified Order and Supplemental Order Approving Settlement Between Chase and the
USTP Dated May 1, 2017 ............................................................................................................... 22
Settlement Modification Regarding Timely Service of PCNs ........................................................ 23
Supplemental Order Regarding the Misapplication of Pre-Petition Fees ..................................... 23
IV. CONCLUSION AND NEXT STEPS ................................................................................................................... 25
-i-
JPMorgan Chase Bankruptcy Settlement: Fourth Report
I. INTRODUCTION
This is the Independent Reviewer’s fourth report (the “Fourth Report”) filed pursuant to the
March 9, 2015 Order Approving Settlement (the “Settlement Agreement”) between the United States
Trustee Program (“USTP”) and JPMorgan Chase Bank, N.A. (“Chase”) (collectively, “the Parties”).1 The
Settlement Agreement, as originally ordered by the Bankruptcy Court for the Eastern District of Michigan,
requires Chase to perform three primary undertakings: (1) to make internal operational changes to the
manner in which it prepares and files payment change notices (“PCN”) and escrow analyses in connection
with Chapter 13 bankruptcy cases (“Bankruptcy cases”); (2) to provide approximately $43 million in
remediation to borrowers in Chapter 13 Bankruptcy cases who were affected by Chase’s PCN and escrow-
related practices; and (3) to donate $7.5 million to the American Bankruptcy Institute’s endowment for
financial education and support for the Credit Abuse Resistance Education Program. The Settlement
Agreement appointed Amy Walsh as the Independent Reviewer to test Chase’s compliance with certain
of these obligations and disclose the results in reports filed with the presiding Bankruptcy Court.
To date, the Independent Reviewer has issued three Reports detailing her oversight
responsibilities: disclosing the status of Chase’s customer remediation and operational changes;
explaining the testing methodologies and procedures the Independent Reviewer employs to assess
Chase’s compliance with the Settlement Agreement; and discussing the test results for the Settlement
Agreement’s testable requirements completed during the relevant testing period. This Fourth Report
addresses results from the current testing period and other pertinent information, including:
 A summary of the content of the Independent Reviewer’s first three Reports;
 A review of the test results from the current testing period, which examines the testable
requirements in paragraphs 30 and 60, paragraphs 47-49 and 53, subparagraph 92(a), and
subparagraph 92(k) of the Settlement Agreement;
 A discussion of recent stipulations modifying and supplementing the Settlement Agreement entered
into by the Parties; and
 An overview of upcoming test results and next steps.
* * *
1
Terms, phrases, and provisions of the Settlement Agreement defined in the Initial Report maintain their
definitions throughout this and subsequent reports by the Independent Reviewer. See, generally, Initial Report
dated December 22, 2015, available at www.chaseindependentreview.com; see also Settlement Agreement,
Exhibit 1 to the Initial Report dated December 22, 2015.
1
II. SUMMARY OF PRIOR REPORTS
Beginning in December 2015, the Independent Reviewer filed her Initial, Second, and Third
Reports with the Court and published the Reports on the Independent Reviewer’s website at
www.chaseindependentreview.com. The first three Reports detail an overview of the Settlement, the
Independent Reviewer’s mandate and testing approach, Chase’s borrower remediation efforts, and the
results of the Settlement compliance testing performed by Chase’s Bankruptcy Review Group (the “BRG”)2
and the Independent Reviewer’s team relating to the requirements under paragraphs 38-39 and 41,
paragraph 40, paragraph 42, paragraphs 44 and 56, paragraphs 76, 78, and 79, and subparagraphs 92(i)-
(j) of the Settlement Agreement. The Independent Reviewer also reported that Chase represented to the
Independent Reviewer that it had completed its borrower remediation obligations by the deadlines set
forth in the Settlement Agreement and applicable letter agreements, though the testing of the various
remediation components was still in progress. By the filing date of the Third Report, the Independent
Reviewer had completed her reporting obligations on approximately 50% of the original testable
requirements under the Settlement Agreement.
This Fourth Report discloses test results for the testable requirements described below. It further
details two additional testable requirements that were added to the Independent Reviewer’s mandate
pursuant to a supplemental agreement between the Parties and a modification to the Settlement
Agreement that were filed with the presiding Bankruptcy Court in the Eastern District of Michigan on May
1, 2017.
III. CURRENT REPORTING PERIOD TEST RESULTS
During the current testing period, the BRG completed its testing and submitted its results to the
Independent Reviewer for the testable requirements under paragraphs 30 and 60, paragraphs 47-49 and
53, subparagraph 92(a), and subparagraph 92(k) of the Settlement Agreement. These paragraphs relate
to:
 The Independent Reviewer’s validation of Chase’s representations concerning: (1) the total number
of PCNs Chase filed during the PCN Relevant Period; (2) the numbers of various different categories
2
The BRG is an organization within Chase’s risk group that is and will remain independent from Chase’s mortgage
servicing business and controls group.
2
of Improperly Filed PCNs3 filed during the PCN Relevant Period;4 and (3) the number of Chase loans in
Bankruptcy cases as of November 19, 2013, that, as of that date, had not had an escrow analysis run
in more than 12 months (¶ 30(a)-(g), ¶ 60);
 Chase’s accounting and remediation for certain PCN conduct in connection with Chase seeking relief
from automatic stays in Bankruptcy cases (¶¶ 47-49, 53);
 The Independent Reviewer’s validation of Chase’s representation that Chase employees substantively
reviewed and verified data in Incorrectly Signed PCNs5 prior to filing during the PCN Relevant Period
(¶ 92(a)); and
 Whether post-Bankruptcy petition escrow analyses prepared and filed in connection with PCNs after
the end of the MSP Moratorium no longer overlay any prior escrow analysis (¶ 92(k)).
As discussed in detail below, the Independent Reviewer has concluded that Chase complied with
its obligations under each of the above-referenced paragraphs of the Settlement Agreement, with the
exception of one subparagraph of paragraph 30 related to Incorrectly Signed PCNs. However, as explained
below, no remediation or corrective action is necessary with respect to this subparagraph because Chase’s
noncompliance related to an inaccurate representation in the Settlement Agreement concerning the
number of a certain category of Incorrectly Signed PCNs.
A. Chase’s Representations Concerning the Numbers of Improperly Filed PCNs and Delayed
Escrow Analyses (Settlement Agreement Paragraphs 30 and 60)
Overview of Paragraphs 30 and 60. Paragraphs 30 and 60 of the Settlement Agreement set forth
Chase’s representations concerning the numbers of Inaccurate PCNs, Untimely PCNs, and various subsets
of Incorrectly Signed PCNs that Chase filed during the PCN Relevant Period (¶ 30), and the number of
Chase loans in Bankruptcy cases as of November 19, 2013, that, as of that date, had not had an escrow
analysis prepared in more than 12 months (¶ 60). Specifically, Chase represented that:
 Chase filed approximately 53,000 PCNs in total during the PCN Relevant Period (¶ 30(a));
3
The term “Improperly Filed PCN” is not used in the Settlement Agreement, but is a corollary of the defined term
“Properly Filed PCN” in the Settlement Agreement (see SA at 4), and describes any PCN filed during the PCN
Relevant Period that was Incorrectly Signed, Untimely, or Substantively Inaccurate.
4
The PCN Relevant Period is the time period between December 1, 2011, and November 19, 2013. See SA,
Article II.
5
“Incorrectly Signed PCNs” are defined as “PCNs filed with bankruptcy courts during the PCN Relevant Period … in
which the signature of the person executing and filing the PCN on Chase’s behalf is that of the person whose
CM/ECF credentials were used to file the PCN with the relevant bankruptcy court although that individual did not
review and verify the contents of the PCN.” SA, Article II.
3
 Approximately 4,380 of the Incorrectly Signed PCNs were filed with the signature and using the
CM/ECF credentials6 of an individual who no longer worked for Chase at the time that the PCNs were
filed (¶ 30(b));
 Approximately 2,285 of the Incorrectly Signed PCNs were filed with the signature of and using the
CM/ECF credentials of a Chase employee who no longer worked in Chase’s bankruptcy department at
the time that the PCNs were filed (¶ 30(c));
CM/ECF credentials of an employee of 4S Technologies7 (¶ 30(d));
CM/ECF credentials of a current Chase Bankruptcy employee, but in most instances this employee
was not the same employee who reviewed and verified the contents of the PCNs pursuant to the
policies and procedures described in paragraph 12 (¶ 30(e));
 Chase filed approximately 462 Substantively Inaccurate PCNs for approximately 325 HELOC loans and
106 non-HELOC loans (which is less than 1% of PCNs filed by Chase during the PCN Relevant Time
Period) (¶ 30(f));
 Chase filed approximately 2,554 Untimely PCNs for 1,892 HELOC loans and 606 non-HELOC loans
(which is less than 5% of PCNs filed by Chase during the PCN Relevant Time Period) (¶ 30(g)); and
 Chase has identified approximately 2,225 loans in Bankruptcy cases as of November 19, 2013, that as
of November 19, 2013, had not had an escrow analysis run in more than 12 months (¶ 60).
The numbers stated above are referred to throughout the Fourth Report as the Settlement
Numbers. The Independent Reviewer must validate whether Chase represented the Settlement Numbers
with substantial accuracy. As detailed below, the Independent Reviewer has concluded that Chase stated
all but one of the Settlement Numbers in paragraphs 30 and 60 with substantial accuracy; however, Chase
failed to state with substantial accuracy the Settlement Number in subparagraph 30(e)—the number of
Incorrectly Signed PCNs that were filed with the signature of and using the CM/ECF credentials of a current
Chase Bankruptcy employee where this employee was not the same employee who reviewed and verified
the contents of the PCNs.
6
As noted in the Third Report, CM/ECF is the Case Management/Electronic Case Filing system that permits litigants
to electronically file documents in the federal court system, which includes bankruptcy courts.
7
4S Technologies (“4S”) was retained by Chase to file PCNs on its behalf during the PCN Relevant Period. 4S
provided the master list of PCNs that Chase relied upon in arriving at its representation that it filed approximately
53,000 PCNs during the PCN Relevant Period. See SA ¶ 30(a).
4
Identification of the Testing Populations for Paragraphs 30 and 60. To effectively evaluate the
accuracy of Chase’s Settlement Numbers in subparagraphs 30(a)-(g) and paragraph 60, the test samples
were selected from three different test populations.
First, to test the accuracy of the total number of PCNs that Chase filed during the PCN Relevant
Period (approximately 53,000), the Independent Reviewer and Chase agreed that the test population
should include all loans for customers in active Chapter 13 Bankruptcy during this time. Accordingly, the
test population for subparagraph 30(a) consisted of 144,848 loans that were in active Chapter 13
Bankruptcy cases at any time between December 1, 2011 and November 19, 2013.
Next, to test the accuracy of the subsets of the PCNs set forth in subparagraphs 30(b)-(g)—the
Untimely, Substantively Inaccurate, and Incorrectly Signed PCNs— the Independent Reviewer and Chase
agreed that the test population should consist of the total number of PCNs that Chase filed during the
PCN Relevant Period. That number was 53,191, according to the master list of PCNs provided by 4S (the
“4S List”).8
Finally, to determine the test population for paragraph 60, the Independent Reviewer and Chase
agreed to perform data queries—which are detailed searches of data fields in Chase’s internal
computerized records (“system of record”)—to isolate loans that were in active Chapter 13 Bankruptcy as
of November 19, 2013, and had not had an escrow analysis performed in more than 12 months according
to Chase’s records.
BRG Testing of Subparagraphs 30(a)-(g). First, the BRG tested the accuracy of Chase’s
representation in subparagraph 30(a) that Chase filed approximately 53,000 PCNs during the PCN
Relevant Period. In order to do this, the BRG took three steps: First, the BRG obtained a statistically
significant sample of loans from the testing population; second, the BRG determined how many PCNs
were filed in connection with these loans; and third, the BRG determined whether those PCNs were
included in the 4S List. The statistically significant sample of loans from this population consisted of 321
loans. The BRG determined that Chase filed 390 PCNs in connection with the 321 loans in the sample by
reviewing the Bankruptcy docket and claims register in PACER. In order to test whether Chase accurately
represented that it filed approximately 53,000 PCNs during the PCN Relevant Period, the BRG determined
whether each of the 390 PCNs associated with the loans in the sample was recorded on the 4S List. If a
PCN was located on the 4S List, it would pass the test; if any PCN was not found on the 4S List, it would be
8
4S provided the master list of PCNs filed on behalf of Chase during the PCN Relevant Period. See SA ¶ 30(a).
Chase relied on the 4S list as the only means of tracking the number of PCNs it filed during the PCN Relevant Period
because 4S, rather than Chase, was responsible for tracking the PCNs that it filed on Chase’s behalf. As explained
in the Initial Report, Chase has discontinued using 4S and now files all PCNs internally and subject to a robust
review process. See Initial Report at 16.
5
an exception. Chase and the Independent Reviewer agreed on an appropriate rate of error, such that if
the number of exceptions in the sample exceeded the error rate, Chase would fail the test for
subparagraph 30(a); conversely, if the number of exceptions in the sample was within the agreed-upon
error rate, Chase would pass the test for subparagraph 30(a). As demonstrated in the table below, the
BRG determined that Chase passed the test for subparagraph 30(a), and therefore concluded that Chase
stated with substantial accuracy the total number of PCNs that Chase filed during the PCN Relevant Period.
Number of
PCNs filed not Maximum
Settlement Number of Number of Number of found on number of
Agreement loans in the PCNs filed per PCNs filed per 4S List exceptions in
Subparagraph sample PACER 4S List (exceptions) the sample Testing Result
30(a) 321 390 377 13 19 Pass
The second iteration of testing under paragraph 30 focused on validating the different categories
of errant PCNs set forth in subparagraphs 30(b)-(g). The BRG drew a new sample from the 53,191 PCNs
identified on the 4S List and tested each PCN to determine whether it exhibited characteristics of one or
more of the categories described in subparagraphs 30(b)-(g). After determining how many PCNs in the
sample fell into each of the categories from subparagraphs 30(b)-(g), the BRG extrapolated those results
to the total number of PCNs in each category throughout the total population. After extrapolating the
total number of PCNs for each category, the BRG compared the extrapolated numbers with the original
Settlement Numbers and determined whether Chase stated the Settlement Numbers with substantial
accuracy, within the applicable threshold variance for each category. If Chase overstated the Settlement
Number, Chase passed this testable requirement; however, if Chase understated the Settlement Number
by an amount in excess of the applicable threshold variance, Chase failed this testable requirement.
The following table details the results of the BRG’s testing:
6
Number of PCNs
Number of PCNs within the population
Settlement stated in the according to Maximum number of
Agreement Settlement validation testing - allowable PCNs in the
Subparagraph Agreement9 BRG population Testing Result
30(b) 4,380 3,823 4,599 SA Overstated - Pass
30(c) 2,285 2,161 2,399 SA Overstated - Pass
30(d) 26,225 23,604 27,536 SA Overstated - Pass
SA Understated in
excess of the
threshold variance -
30(e) 20,301 22,440 21,316 Fail
30(f) 462 166 1,060 SA Overstated - Pass
SA Understated within
the threshold variance
30(g) 2,554 2,660 2,681 - Pass
The BRG reported the above results to the Independent Reviewer and concluded that Chase
stated with substantial accuracy all of the Settlement Numbers with the exception of one category of the
Incorrectly Signed PCNs, which is described in subparagraph 30(e) (Chase employee who signed the PC
was not the same Chase employee who reviewed the PCN). The BRG provided its testing workpapers for
review and testing by the Independent Reviewer and her team.
Independent Reviewer’s Testing of Subparagraphs 30(a)-(g). The Independent Review team’s
assessment of the BRG’s paragraph 30 testing involved a detailed retesting of all 321 loans tested by the
BRG with respect to its review of subparagraph 30(a), and retesting of all 320 loans tested by the BRG for
its testing for subparagraphs 30(b)-(g). The Independent Reviewer and her team interacted extensively
with the BRG to resolve questions that arose during the testing process. After completing the loan-level
testing, the Independent Review team compared its findings with those from the BRG. The following table
sets forth the results of the Independent Reviewer’s loan-level testing with respect to its review of
subparagraph 30(a), which are consistent with the BRG’s findings:
Number of
PCNs filed not Maximum
Settlement Number of Number of Number of found on number of
Agreement loans in the PCNs filed per PCNs filed per 4S List exceptions in
Subparagraph sample PACER10 4S List (exceptions) the sample Testing Result
30(a) 321 392 377 15 19 Pass
9
Chase represented each number in the Settlement Agreement as approximate.
10
Through its testing, the Independent Review team identified two additional PCNs, which the BRG subsequently
confirmed, increasing the total number of PCNs tested (i.e., compared to 4S’s list) to 392 rather than 390.
7
The following table sets forth the results of the Independent Reviewer’s loan-level testing with
respect to its review of subparagraphs 30 (b)-(g), which are consistent with the BRG’s findings:
Number of PCNs
within the population
Number of PCNs according to
Settlement stated in the validation testing – Maximum number of
Agreement Settlement Independent Review allowable PCNs in the
Subparagraph Agreement11 Team population Testing Result
30(b) 4,380 3,989 4,599 SA Overstated - Pass
30(c) 2,285 1,828 2,399 SA Overstated - Pass
30(d) 26,225 23,519 27,536 SA Overstated - Pass
30(e) 20,301 22,525 21,316 SA Understated - Fail
30(f) 462 166 1,060 SA Overstated - Pass
30(g) 2,554 2,650 2,681 SA Understated – Pass
As indicated above, the Independent Reviewer’s testing led her to the same conclusion as the
BRG: Chase stated the Settlement Numbers with substantial accuracy, except that Chase substantially
understated the number of Incorrectly Signed PCNs set forth in subparagraph 30(e). Subparagraph 30(e)
states that approximately 20,301 of the Incorrectly Signed PCNs were filed with the signature of and using
the CM/ECF credentials of a current Chase bankruptcy employee, but that in most instances this employee
was not the same person who substantively reviewed and verified the contents of the PCNs prior to filing.
Though Chase understated the approximate number of Incorrectly Signed PCNs within this category by
approximately 11%, no corrective action is associated with this testing failure. The Independent Reviewer
concluded that no corrective action was required in this instance because any customers who were
adversely impacted by the Incorrectly Signed PCNs were remediated and tested pursuant to separate
provisions of the Settlement Agreement. See SA, Article VI (PCN Corrective Action).
With regard to subparagraph 30(f), the Independent Reviewer noted that the agreed-upon
sampling methodology resulted in an outcome that the Independent Reviewer thought warranted further
testing: the randomized sample pulled for testing subparagraphs 30(b)-(g) contained only one
Substantively Inaccurate PCN. Because of this result, and because Substantively Inaccurate PCNs pose the
most risk of harm to debtors in Bankruptcy cases, the Independent Reviewer decided, and Chase agreed,
that additional testing related to the Substantively Inaccurate population was appropriate in these
circumstances.
11
Chase represented each number in the Settlement Agreement as approximate.
8
Specifically, Chase agreed to the Independent Reviewer’s request that the BRG conduct additional
testing using a reverse sampling approach: the BRG removed the 462 known Substantively Inaccurate
PCNs from the total population of all PCNs filed during the PCN Relevant Period, and then tested a new
sample from the remaining population. The purpose of testing a new sample after removing the 462
known Substantively Inaccurate PCNs was to determine through sampling whether there were any
additional Substantively Inaccurate PCNs in the population for which Chase failed to account. The
following table sets forth the BRG’s results from the additional testing for paragraph 30(f):
Number of New Maximum
Number of PCNs Substantively allowable
Settlement stated in the Inaccurate PCNs exceptions based
Agreement Settlement Retesting Sample Found in new on agreed-upon
Subparagraph Agreement Size sample- BRG error threshold Testing Result
30(f) 462 320 0 7 Pass
The BRG did not identify any additional Substantively Inaccurate PCNs in the new sample; thus,
the BRG concluded that Chase stated the number of Substantively Inaccurate PCNs in subparagraph 30(f)
with substantial accuracy.
Like the Independent Reviewer’s testing of the original sample, the Independent Reviewer and
her team conducted a detailed retesting of the 320 PCNs in the new sample described above. The
Independent Reviewer’s results were as follows:
Number of New
Substantively Maximum
Number of PCNs Inaccurate PCNs allowable
Settlement stated in the Found – exceptions based
Agreement Settlement Retesting Sample Independent on agreed-upon
Subparagraph Agreement Size Review Team error threshold Testing Result
30(f) 462 320 1 7 Pass
The Independent Review team identified one additional Substantively Inaccurate PCN in the
sample, which fell within the agreed-upon error threshold; therefore, the Independent Review team
concurred with the BRG’s test results. Accordingly, the Independent Reviewer concluded that Chase
stated with substantial accuracy the number of Substantively Inaccurate PCNs in the Settlement
Agreement.
BRG Testing of Paragraph 60. In paragraph 60, Chase represented that there were 2,225 loans
in Chapter 13 Bankruptcy cases as of November 19, 2013 that, as of that date, had not had an escrow
analysis performed in more than 12 months (“EA-Delinquent Loans”). In order to validate the 2,225
Settlement Number, the BRG performed searches within its applicable systems of record to isolate all
loans that met the criteria set forth in paragraph 60 by designing logic queries aimed at isolating loans
9
with the specific characteristics of this population. If paragraph 60 overstated the actual number of EA-
Delinquent Loans, the BRG would conclude that Chase passed this testable requirement. On the other
hand, if paragraph 60 understated the actual number of EA-Delinquent Loans beyond the allowable error
threshold, the BRG would conclude that Chase failed this testable requirement. The following graph sets
forth the BRG’s results:
Number of PCNs Settlement
Settlement stated in the Agreement
Agreement Settlement Results from Systemic Overstated or
Paragraph Agreement Query Analysis Understated Testing Result
60 2,225 1,701 Overstated Pass
Independent Reviewer Testing of Paragraph 60. The Independent Reviewer tested the BRG’s
conclusion regarding the number of loans set forth in paragraph 60 primarily by relying on members of
her team from BDO who are experts in reading and interpreting query logic and data collection. These
experts reviewed the manner in which the system queries were set up: They examined the loan
characteristics and how the query isolated these characteristics; they examined the datafields to ensure
the effectiveness of the query; and they examined other system flags that the BRG employed in isolating
the number of loans in active Chapter 13 Bankruptcy as of November 19, 2013, and the dates of the last
escrow analyses performed for these loans. BDO’s logic experts concluded that the BRG’s query
parameters and data fields were appropriate and that the system flags conformed to the description of
the loan population in paragraph 60, and thus would satisfactorily isolate the loans in question. Reviewing
these queries in an independent testing setting, the Independent Reviewer and her team found the
following results:
Number of PCNs Settlement
Settlement stated in the Agreement
Agreement Settlement Results from Systemic Overstated or
Paragraph Agreement Query Analysis Understated Testing Result
60 2,225 1,701 Overstated Pass
The Independent Review team therefore concurred with the BRG’s test results and concluded
that Chase stated with substantial accuracy the number of loans set forth in paragraph 60.
10
B. Chase’s Representations Concerning Its Employees’ Review and Verification of Data Contained
in the Incorrectly Signed PCNs Prior to Filing (Settlement Agreement Paragraph 92(a))
Overview of Subparagraphs 92(a). Subparagraph 92(a) of the Settlement Agreement requires

the Independent Reviewer to assess whether “Chase employees substantively reviewed and verified the
data contained in the Incorrectly Signed PCNs before the PCNs were filed.” This part of the Independent
Reviewer’s mandate stems from representations Chase made in the Settlement Agreement, including that
“[d]uring the PCN Relevant Period, Chase had policies and procedures in place that required Chase
employees to, among other things, verify the contents of a PCN by reviewing the data in the PCN and
comparing it to the account information contained in the system of record,” and that “it is Chase’s belief
that its PCNs were substantively reviewed before they were filed even if an Incorrectly Signed PCN was
not reviewed by the person who signed it.” SA ¶¶ 12, 15.
As detailed below, the Independent Reviewer has concluded that Chase’s employees did
substantively review and verify the data in PCNs prior to filing them during the PCN Relevant Period.
Setting the Testing Parameters for Subparagraph 92(a). The Independent Reviewer and Chase
agreed that validating the above representation required three components: (1) assessing whether
policies and procedures existed during the PCN Relevant Period that required PCN reviewers to
substantively review data in a PCN prior to filing; (2) testing a statistical sample of the total number of
PCNs filed during the PCN Relevant Period to examine whether PCNs in the sample contain evidence that
a PCN analyst substantively reviewed the PCN prior to filing; and (3) interviewing current Chase employees
who worked as PCN analysts during the PCN Relevant Period.
As with other testable requirements in the Settlement Agreement, the BRG performed the initial
testing related to the policies and procedures assessment and the loan-level PCN sample testing.
However, the Independent Reviewer alone conducted interviews of the Chase employees who worked on
PCNs during the relevant period.
BRG Testing of Subparagraph 92(a).
1. Policies and Procedures. The BRG first assessed the policies and procedures component of
this testing. To validate this requirement, the BRG examined whether Chase maintained policies and
procedures during the PCN Relevant Period that included language requiring its employees to
substantively review and verify the data contained in PCNs prior to filing. Specifically, the BRG examined
11
the following policies and procedures maintained by JPMorgan Chase or its Mortgage Banking practice
during the PCN Relevant Period:12
Policies Procedures
● Mortgage Banking Execution of Sworn Documents ● Mortgage Banking Bankruptcy Procedure for Sworn
● Mortgage Banking Sworn Document Execution Documents and Other Signed Documents
Requirements ● Bankruptcy Sworn Document Execution Procedure
● JPMC Sworn Documents Policy ● Payment Change Notice Procedure
● Mortgage Banking Supplemental Sworn Documents ● Mortgage Banking Home Equity Procedures for Sworn
Policy Documents
● Home Equity Payment Change Notice Procedure
Assessments Training
● Bankruptcy Authorized Signature for Prime/Non-Prime ● JPMC Corporate Sworn Document Training
Assessments
● Morgan Lewis Re-Certification Assessment
● Bankruptcy Prime Non-Prime Authorized Signer
Assessment
● Bankruptcy PNP Authorized Signer Annual Assessment
● Morgan Lewis Re-Certification Assessment
Job Aids QC/QA Results
● MSN PCN Job Aid ● Quality Control (QC) Results for PCNs
● VLS PCN Job Aid ● Quality Assurance (QA) Results for PCNs
The BRG found that the above-listed documents contained language sufficient to make clear to
PCN analysts that they must substantively review and verify the data contained in PCNs prior to filing. 13
For example:
 The Payment Change Notice Procedures lists the steps that must be taken to verify specific details
relating to the PCN prior to filing, including verifying among other details: the customer’s account
number; Chase’s proof of claim in the relevant Bankruptcy case; whether circumstances such as property
surrender apply; and that current and new payment amounts and the rate-effective dates correspond
with Chase’s applicable system of record.
 The Sworn Document Training states that Chase employees responsible for preparing sworn
documents must undergo Sworn Document Training annually, which covers the scope of the Sworn
12
Chase previously interviewed some of its employees who worked on PCNs during the PCN Relevant Period as
part of its internal investigation into PCN-related issues that were the subject of the Settlement Agreement (see SA
¶ 92(a)), but the BRG did not conduct interviews as part of its testing of paragraph 92(a).
13
The following section details the Independent Reviewer’s interviews of Chase employees; it was evident during
these interviews that the majority of the Chase employees were provided with and trained on applicable PCN and
sworn-document policies at the time they were working on PCNs.
12
Documents Policy, the description of documents covered by that policy, employees’ signing authority, and
the requirement that employees must verify the representations made in the document.
 The PCN Job Aids outline the specific steps a PCN analyst must undertake to verify the accuracy of a
PCN, including the current and new payment amounts and the rate-effective date; the Job Aids also
contain screen shots from the applicable systems of record to illustrate the steps necessary to verify each
detail.
Because the policies and procedures Chase used during the PCN Relevant Period adequately and
clearly instructed PCN analysts to substantively review data contained in PCNs prior to filing, the BRG
concluded that Chase passed this prong of the test under subparagraph 92(a).
2. PCN Sampling. The BRG next tested a sample of PCNs from the PCN Relevant Period to
determine whether the PCNs contained evidence that a Chase employee substantively reviewed the data
in the PCN prior to filing. Of the 53,191 Incorrectly Signed PCNs, the BRG randomly selected a statistically
significant sample of 321 loans. To satisfy this testing component, the Independent Reviewer and Chase
agreed that each sampled PCN must contain evidence that the PCN was reviewed by a Chase PCN analyst
who was employed within the bankruptcy department as of the PCN filing date. This evidence took the
form of the appearance of the relevant employee’s name following an “approved by” endorsement, or
the employee’s identification number—both of which only appear on the PCN after a Chase employee
electronically confirmed the substantive review in the applicable Chase system. After reviewing each PCN
in the sample for the above-described evidence and then confirming that the employees who approved
the PCNs were employed in the bankruptcy department at the relevant time, the BRG concluded that all
PCNs in the sample contained such evidence. The BRG then reported to the Independent Reviewer that
Chase passed the second component of testing under subparagraph 92(a).
The BRG’s work was complete after it tested the first two components of the three-pronged test
for subparagraph 92(a). The BRG subsequently provided its work papers for review and testing by the
Independent Reviewer and her team.
Independent Reviewer’s Testing of Subparagraph 92(a). The Independent Reviewer conducted
independent testing of these first two components described above, and then conducted employee
interviews for the third component of the subparagraph 92(a) testing.
1. Policies and Procedures. The Independent Review team’s testing for the first component
under subparagraph 92(a) involved a detailed independent review of each policy and procedure provided
by Chase and reviewed by the BRG. See Table of Policies and Procedures, supra at 12. After this review,
the Independent Reviewer concluded that Chase’s policies and procedures during the PCN Relevant
Period required PCN analysts to substantively review the data in PCNs prior to filing and provided specific
13
steps and job aids demonstrating how to accomplish this objective. Accordingly, the Independent
Reviewer concurred with the BRG and concluded that Chase passed the first component of the testing for
subparagraph 92(a).
2. PCN Sampling. The Independent Reviewer’s testing for the second component under
subparagraph 92(a) involved a detailed retesting of all 321 PCNs in the sample. The Independent Reviewer
and her team interacted extensively with the BRG to resolve questions that arose during the testing
process. The Independent Review team’s testing consisted of several steps. First, the team referred to
Chase’s Human Resources employee file to locate the names of the employees in the “approved by” fields
on each PCN, or the employees’ identification numbers listed on the respective PCNs. The team then
reviewed the Human Resources employee file for each employee’s employment status, effective dates,
and the departments in which each employee worked on various effective dates. The Independent
Reviewer determined that a PCN would pass this testing component if it: (1) contained evidence of the
PCN being “approved by” a Chase employee either by name or identification number, and (2) the name
or identification number on the PCN corresponded to a Chase employee who was an active member of
the bankruptcy department at the time the PCN was filed. After completing the PCN-level review, the
Independent Reviewer concurred with the BRG’s test results and concluded that Chase passed the PCN-
sampling component of the subparagraph 92(a) testing.
3. Employee Interviews. In January 2017, the Independent Reviewer and two members of her
team travelled to Chase’s office in Dallas, Texas, where its bankruptcy department is located. While in
Dallas, the Independent Reviewer interviewed 12 Chase employees who reviewed PCNs or supervised
teams of PCN analysts during the PCN Relevant Period.14 During the employee interviews, the
Independent Reviewer covered topics including, but not limited to: employees’ employment history at
Chase, including time in the bankruptcy department and jobs performed in that department; employees’
knowledge concerning PCNs and their purpose in Bankruptcy cases; employees’ recollection of the
systems used and steps required to review PCNs during the PCN Relevant Period;15 and, employees’
14
The 12 employees interviewed are the only employees currently employed by Chase who worked on PCNs
during the PCN Relevant Period. At its height, the number of Chase employees who reviewed PCNs during the PCN
Relevant Period was 61; however, by the time Chase conducted its own internal review prior to entering into the
Settlement Agreement in early 2015, only 25 of those employees remained at Chase. By the time the Independent
Reviewer sought to conduct interviews, only 12 of these employees remained; the Independent Reviewer thus
interviewed all 12 employees.
15
Only one of the 12 employees interviewed presently works on PCNs and PCN-related issues. The current process
for preparing PCNs varies significantly from the process used during the PCN Relevant Period, and includes
substantial operational enhancements and controls that are referenced in the Settlement Agreement (see SA
paras. 32-34) and which the Independent Reviewer examined and reported on in her Third Report.
14
recollection of policies, procedures, and job aids they may have used in connection with preparing PCNs
during the PCN Relevant Period. The Independent Reviewer also asked questions of each employee
related to whether he or she substantively reviewed and verified the data contained in PCNs prior to filing
and, if so, how each employee performed such a review. The employees responded to all of the
Independent Reviewer’s questions with credible, straight-forward answers. After completing the
interviews, the Independent Reviewer concluded that 10 of the 12 employees interviewed complied with
Chase policies and procedures by substantively reviewing and verifying the data in PCNs prior to filing
during the PCN Relevant Period. With regard to the remaining two employees, the Independent Reviewer
concluded that one employee did not recall substantively reviewing PCNs, and that the other employee
did not consistently perform a substantive review of the PCNs. These two employees were not full-time
PCN analysts (they informed the Independent Reviewer that they assisted in preparing PCNs only on an
as-needed basis and that this was never their primary function), and they did not recall being extensively
trained to prepare PCNs. Nonetheless, the remaining ten employees appeared to have been trained
adequately to review and verify PCN data prior to filing, and they credibly stated that they adhered to
their training and Chase policies when they reviewed the data in PCNs. Accordingly, the Independent
Reviewer concluded that Chase passed the third component of testing for subparagraph 92(a).
Because Chase passed each of the three testing components for subparagraph 92(a)—the policies
and procedures review, the PCN sample testing, and the employee interviews—the Independent
Reviewer concluded that Chase’s employees substantively reviewed and verified the information in
Incorrectly Signed PCNs prior to filing during the PCN Relevant Period.
C. Validation of Motion for Relief from Stay Practices (Paragraphs 47-49 and 53)
Overview of Paragraphs 47-49 and 53. Chase represented in the Settlement Agreement that it
would refrain from seeking automatic stay relief in any Bankruptcy case in which a payment change was
not noticed or not timely noticed via a filed PCN during the PCN Relevant Period unless and until: (1) Chase
had undertaken a full account reconciliation of all post-petition payments to determine all amounts due
and owing, and account for any unnoticed or untimely noticed payment changes; and (2) depending on
the circumstances, either provided customers with the benefit of the lower payment amount, or credited
customers’ accounts for the difference between the previous monthly payment and the new monthly
payment for the time frame applicable under these paragraphs. SA ¶¶ 47-49. In addition, when Chase
seeks relief from stay or responds to a notice of final cure in cases in which Chase filed a Substantively
Inaccurate PCN, Chase must rely on its applicable system of record during its post-petition reconciliation,
rather than an incorrect payment amount contained in a Substantively Inaccurate PCN. SA ¶ 53.
15
To validate Chase’s compliance with paragraphs 47-49 and 53, the Independent Reviewer and
Chase agreed to sample loans from customers in Bankruptcy cases for whom Chase sought relief from
automatic stay and who, during the PCN Relevant Period, had payment increases or decreases for which
Chase either did not file a PCN, filed an Untimely PCN,16 or filed a Substantively Inaccurate PCN.17 After
determining how to isolate the relevant population, the Independent Reviewer and Chase agreed to a
two-pronged test: (1) whether the amount claimed due and owing on Chase’s motion for relief from the
automatic stay takes into account all post-petition payments; and (2) whether the customer was provided
the correct amount of relief for the unnoticed payment change or untimely payment increase. As detailed
below, the Independent Reviewer concluded that Chase satisfied its obligations under paragraphs 47-49
and 53 of the Settlement Agreement.
Identification of the Testing Population for Paragraphs 47-49 and 53. To isolate the relevant
population for testing paragraph 47-49 and 53, the Independent Reviewer and Chase agreed to sample
loans in Bankruptcy that satisfied the following criteria: (1) Chase filed a motion for relief from stay after
March 26, 2015;18 (2) the customer’s monthly payment increased or decreased during the PCN Relevant
Period according to Chase’s applicable system of record; and (3) a PCN was not filed to provide notice of
the payment increase or decrease or was untimely filed for a payment increase, or was Substantively
Inaccurate. After isolating the base population, which yielded 1,120 loans, the Independent Reviewer and
Chase tested a randomly selected statistically significant sample from that population, which consisted of
250 loans.
BRG Testing of Paragraphs 47-49 and 53. Once the sample test population for paragraphs 47-49
and 53 was identified, the BRG first tested the 250 sampled loans to verify whether the amount claimed
as due and owing on Chase’s motion for relief was less than or equal to the recalculated post-petition
amount due according to Chase’s system of record, or if greater, that the amount was within the loan
level tolerance for dollar-amount error. The BRG’s work consisted of a comparison between the amount
due from the customer based on an accounting of the customer’s actual post-petition payments received,
and the amount due from the customer according to Chase’s motion for relief.
16
“Untimely PCNs” are defined as PCNs filed during the PCN Relevant Period that were filed less than 21 days
before a payment in the new amount was due or were filed after the effective date of the new payment amount.
SA, Article II.
17
“Substantively Inaccurate PCNs” are defined as “PCNs filed during the PCN Relevant Period that did not provide
the borrower with (1) the correct payment change amount, or (2) the correct date that the new payment change
would go into effect.” SA, Article II.
18
March 26, 2015 is the effective date of the Settlement Agreement and the due date for Chase’s obligations
under Settlement Agreement paragraphs 47-49 and 53.
16
Once the BRG completed the post-petition account reconciliation, the BRG then determined if the
credit Chase provided to the customer was correctly calculated. To make this determination, the BRG
calculated the proper credit amount based on its own examination of the available evidence. The BRG
first reviewed all payment changes that occurred, whether or not a PCN was filed in connection with it.
The BRG then determined whether these payment changes were noticed, and, when noticed, whether
the notice was timely and accurate. For payment changes that were unnoticed, untimely, or inaccurate,
the customer received remediation in the form of retaining the benefit of the lower payment in the case
of unnoticed payment decreases, or any applicable credit for the difference between the previous
payment and the amount of the increased payment in the case of unnoticed or untimely payment
increases. For customers who received Substantively Inaccurate PCNs, the BRG calculated the credit to
be the difference between the payment due per the PCN and the payment due per the Chase system of
record. If the BRG’s calculated credit was less than the credit Chase provided to the customer, the loan
passed this portion of the test; if the BRG’s calculated credit was greater than the credit Chase provided
above a certain threshold error rate, the loan failed this portion of the test.
The BRG then examined its post-petition account reconciliation results together with its credit
calculation results. The following table sets forth the results of the BRG’s testing:
Number of Loans in Test Number of Errors Percentage of Errors in
Population Found Total
250 12 4.8%
Because the number of loan failures in this sample was equal to or less than the threshold error
rate for this validation protocol, the BRG reported to the Independent Reviewer that Chase satisfied the
testable requirements of paragraphs 47-79 and 53, and provided its work papers for review and testing
by the Independent Reviewer and her team.
Independent Reviewer’s Testing of Paragraphs 47-49 and 53. The Independent Reviewer tested
Chase’s compliance with paragraphs 47-49 and 53 by conducting a detailed retesting of the 250 loans
originally tested by the BRG. Throughout that retesting process, the Independent Reviewer and her team
interacted extensively with the BRG to resolve questions that arose during the testing process.
The Independent Review team first tested the 250 sampled loans for evidence demonstrating that
the amount claimed as due and owing on Chase’s motion for relief was less than or equal to the
recalculated post-petition amount due as determined by the Independent Reviewer, or if greater, within
the loan level tolerance for dollar-amount error. The Independent Review team’s recalculation, like that
of the BRG, consisted of a full reconciliation of the customer’s account. Once the reconciliation was
complete, the Independent Review team compared the amount that Chase represented was due from
17
the customer in Chase’s motion for relief versus the amount that was due from the customer based on an
accounting of the customer’s actual post-petition payments received and monthly payments due from
noticed and unnoticed payment changes. The Independent Reviewer considered all the scenarios
referenced above that could impact the applicable account reconciliation date range, and also considered
as part of the calculation any credit that Chase provided under these or other provisions of the Settlement
Agreement, or for other business-related reasons.
Once the Independent Review team completed the post-petition account reconciliation, the
Independent Review team then determined if any credit provided pursuant to paragraphs 47-49 was
correctly calculated. The Independent Review team first reviewed all PCNs filed in PACER during the PCN
Relevant Period. The Independent Review team next identified all other payment changes that occurred
within an account for which a PCN was not previously filed. If the Independent Review team located a
Substantively Inaccurate PCN, it calculated the credit as the difference between the amount due per
Chase’s system of record and the amount due per the PCN. For other payment changes that were
unnoticed, untimely, or inaccurate, the Independent Review team either provided the customer with the
benefit of the lower payment in the case of unnoticed payment decreases, or calculated any applicable
credit between the previous payment and the amount of the increased payment (in the case of unnoticed
or untimely payment increases.19 If the Independent Review team’s calculated credit was less than the
credit Chase provided to the customer, the loan passed this portion of the test; if the Independent Review
team’s calculated credit was greater than the credit Chase provided, the loan failed this portion of the
test.
The Independent Reviewer then examined its post-petition account reconciliation results
together with its credit calculation results. With regard to specific loans in the sample, the Independent
Reviewer and the BRG disagreed about testing results for certain loans. The Independent Reviewer
concluded that some loans that the BRG passed were in fact fails, but also concluded that some loans that
the BRG failed were in fact passes. Despite the disagreement over certain loan test results, the overall
number of loan passes and fails was the same for both the Independent Reviewer and the BRG.
Accordingly, the following table sets forth the results of the Independent Reviewer’s testing:
250 12 4.8%
19
The Independent Review team identified several exceptions that resulted in no credit required. Examples of
these exceptions are Bankruptcy case conversion to Chapter 7; dismissal or discharge from Bankruptcy; loan
transfer to another servicer; loan paid in full; vacant property; cramdown or motion to value; or property
surrender.
18
Because the number of loan failures in this sample came within the agreed-upon threshold error
rate, the Independent Reviewer concluded that Chase satisfied the testable requirements of
paragraphs 47-49 and 53.
D. Absence of Escrow Overlay in Post-Petition Escrow Analyses (Subparagraph 92(k))
Overview of Subparagraph 92(k). The Settlement Agreement requires the Independent Reviewer
to verify that Chase’s post-petition annual escrow analyses attached to PCNs filed after the Moratorium
no longer improperly replace any prior escrow analyses. This aspect of the Independent Reviewer’s
mandate relates to what the Settlement calls the Escrow Overlay issue, which is described in paragraphs
63-73 of the Agreement. At bottom, the Escrow Overlay issue was a technological problem: in 2009,
Chase learned that its Mortgage Servicing Platform (“MSP”), which is administered by a technology
company known as Black Knight Financial Services (“Black Knight”), could only store two escrow analyses
at a time—the current escrow analysis and the pending escrow analysis that was prepared but not yet
effective. If a customer was delinquent on mortgage payments and thus the pending escrow analysis had
not become effective at the time a third escrow analysis was prepared, the third escrow analysis would
overwrite or “overlay” the pending escrow analysis.
Chase worked with Black Knight to correct the technological issue, and Chase provided certain
remediation to customers whose accounts were impacted by the Escrow Overlay issue and certain related
issues. See generally SA Article X, at 21. Chase represents that its MSP system now stores up to ten
escrow analyses at any one time, eliminating the Escrow Overlay problem. These system changes became
effective in November 2013. The Settlement Agreement requires the Independent Reviewer to use a
sampling methodology to validate whether Chase’s MSP system no longer exhibits the Escrow Overlay
issue.
Subparagraph 92(k) also requires the Independent Reviewer to test and verify the timeliness of
annual escrow analyses that were not part of the Moratorium Delayed Escrow Population (see SA para.
61) or part of the Pre-Moratorium Delayed Escrow Population (see SA para. 60). Timeliness for purposes
of this testing was evaluated based on whether an escrow analysis was run annually.
Identification of the Testing Population for Subparagraph 92(k). Similar to other testable
requirements in the Settlement Agreement, the Independent Reviewer was required to use sampling to
test the efficacy of the technological correction in solving the Escrow Overlay issue. Because the
Settlement Agreement requires the Independent Reviewer to test a sample of escrow analyses that were
attached to PCNs filed after the Moratorium, the base population from which to draw such a sample
consisted of the total number of PCNs (54,522) filed in connection with loans stored on Chase’s MSP
19
system after the end of the MSP Moratorium on October 31, 2014, through the date of the BRG’s testing
in August 2016. The statistically significant sample from this population resulted in 320 PCNs that were
filed with attached escrow analyses.
BRG Testing of Subparagraph 92(k). The BRG first tested whether the escrow analyses in the
sample displayed any evidence of overlay. The BRG then tested whether the escrow analyses in the
sample were timely.
To validate that no overlay occurred, the BRG reviewed numerous indicators of potential overlay,
including, among other evidence: (1) the statement and effective dates of the sample loans’ current
escrow analyses; (2) systemic searches demonstrating the dates on which escrow analyses were
generated and stored for the sample loans; (3) images of the applicable escrow analyses for the sample
loans, and for two escrow analyses generated immediately prior; and (4) images from the MSP system
corresponding to each escrow analysis, displaying payment amount, and statement and effective dates.
Next, the BRG examined each sampled loan to determine whether the escrow analysis was timely.
To pass the timeliness test, the escrow analysis in the sample must have been either (1) generated fewer
than thirteen months after the last escrow analysis was generated, or (2) made effective fewer than
thirteen months after the last escrow analysis was generated.
The BRG then considered the results of both the overlay and timeliness analyses. The following
table sets forth the results of the BRG’s testing:
37720 4 1.06%
Because the percentage of errors identified by the BRG did not exceed the agreed-upon threshold
error rate for this test, the BRG reported to the Independent Reviewer that Chase satisfied the testable
requirements of subparagraph 92(k) and provided its work papers for review and testing by the
Independent Reviewer and her team.
20
The original sample for this testing included 320 loans; however, the BRG initially excluded a number of loans
from the sample due to circumstances that make them inapplicable for testing, including 57 loans for which the
escrow analysis attached to a PCN was prepared prior to the end of the Moratorium (but the PCN attaching the
escrow analysis was filed after the Moratorium). The BRG’s practice when excluding loans is to draw new sample
loans from the base population to replace the excluded loans and to ensure that a statistically significant number
of loans is tested. But, after the Independent Reviewer began her testing under subparagraph 92(k), she
questioned the exclusion of these 57 loans and determined that they should, in fact, remain in the test population.
Accordingly, the BRG reintroduced these loans into the test population without retracting the loans that had
replaced them, thereby increasing the overall number of samples in the test population.
20
Independent Reviewer’s Testing of Subparagraph 92(k). The Independent Reviewer began her
assessment by conducting a review of the applicable policies and procedures and a detailed retesting of
the 377 loans originally tested by the BRG in connection with Chase’s MSP system, including the 57
previously excluded loans that were reintroduced into the test population. See Footnote 21, supra.
Throughout that retesting process, the Independent Reviewer and her team interacted extensively with
the BRG to resolve questions that arose during the testing process.
With respect to the Escrow Overlay issue, the Independent Review team reviewed the same
indicators from Chase’s systems of record that had the potential to display overlay issues, including images
of the applicable escrow analyses for the sample loans and for two escrow analyses generated
immediately prior, as well as images from the MSP system corresponding to each escrow analysis which
displayed payment amounts and statement and effective dates. The Independent Review team then
turned to the escrow timeliness issue. To determine whether each escrow analysis attached to a sample
PCN was timely, the Independent Review team calculated the number of months between the statement
dates of the escrow analysis in the sample and the escrow analysis generated immediately prior, and
similarly calculated the number of months between the effective dates of the same two escrow analyses.
The Independent Review team then compared those date ranges to the 13-month threshold.
The Independent Reviewer then considered the results of the overlay and timeliness testing to
determine whether the sampled loans passed this testable requirement. The following table sets forth
the results of the Independent Reviewer’s testing, which is consistent with the BRG’s findings:
377 4 1.06%
Because the Independent Review team concurred with the BRG’s testing and the percentage of
errors did not exceed the agreed-upon threshold error rates for the total number of loans in the sample,
the Independent Reviewer concluded that Chase satisfied the requirements of subparagraph 92(k).
E. Additional Test Results Submitted During the Current Testing Period
In addition to the Independent Reviewer’s conclusions with respect to the test results reported
above, during the current testing period the BRG completed its testing and submitted its workpapers to
the Independent Reviewer in connection with the following paragraphs:
 Paragraphs 54 and 57: Validating the customer relief Chase provided in connection with unfiled PCNs
during the Moratorium;
 Paragraphs 55 and 57: Validating Chase’s remediation for customers in Bankruptcy whose loans had
delayed escrow analyses as a result of the Moratorium;
21
 Paragraphs 50-53: Validating Chase’s remediation for customers in Bankruptcy whose loans had
untimely or unfiled PCNs and where the customer (or customer’s Bankruptcy trustee) filed a notice of
final cure; and,
 Paragraphs 76-77, 79: Validating Chase’s remediation for customers in Bankruptcy who fall into the
Pre-Moratorium Delayed Escrow Population (meaning their loans had delayed escrow analyses as a result
of Chase’s business practices prior to the Moratorium).
The Independent Reviewer’s assessment of the BRG’s test results with respect to the above
paragraphs is in progress. As in the case of the testable requirements for which the Independent Reviewer
has rendered her conclusions in this Report, the Independent Reviewer is currently working closely with
Chase and the BRG to understand the BRG’s testing and resolve issues that may impact her independent
testing and assessment of Chase’s compliance with these Settlement Agreement paragraphs. Pending the
resolution of any issues, the Independent Reviewer’s conclusions will be disclosed in her next report.
Once the Independent Reviewer reports on these remaining testable requirements, the Independent
Reviewer will have reported her conclusions with respect to all of the original testable requirements under
the Settlement Agreement prior to its amendment, which is discussed in detail below.
F. Amended Order and Supplemental Order Approving Settlement Between Chase and the USTP
Dated May 1, 2017
The original Settlement Agreement was entered in the United States Bankruptcy Court in the
Eastern District of Michigan on March 9, 2015. Since that time, two additional issues have arisen, both of
which relate to Chase customers in Chapter 13 Bankruptcy cases. As described more fully below, the first
issue relates to the untimely service (rather than filing) of PCNs and the inaccuracy of the certificates of
service attached to those untimely served PCNs. The second issue relates to the inaccuracy of post-
petition monthly account statements for home equity loans stored on Chase’s Vendor Loan System
(“VLS”) resulting from the misapplication of pre-petition fees as post-petition fees.21 The USTP and Chase
reached an agreement regarding both of these issues, and part of that agreement was that the validation
testing for these two issues should be added to the Independent Reviewer’s oversight responsibilities.
Accordingly, on May 1, 2017, the Parties filed the Stipulation for Modification of Agreement Embodied in
Order Approving Settlement Between the United States Trustee Program and JPMorgan Chase Bank, N.A.
(attached as Exhibit A) and the Stipulation for Entry of Order Approving Supplemental Settlement
21
The issue relating to the misapplication of pre-petition fees in VLS was still under investigation by Chase at the
time the original Settlement Agreement was filed, as reflected in paragraph 100 of the Settlement Agreement.
22
Between the United States Trustee Program and JPMorgan Chase Bank, N.A. (attached as Exhibit B), which
reflected the expansion of the Independent Reviewer’s mandate.
Settlement Modification Regarding Timely Service of PCNs. In early 2016, Chase became aware
that, in many cases in which Chase timely filed a PCN, Chase did not timely serve the PCN on the borrower
because of a delay in mailing. Because of this delay in mailing, many of the certificates of service attached
to those PCNs contained representations regarding mailing dates that were not accurate. As a result,
some customers received the notice of payment change less than 21 days before the new payment
amount was due, in violation of the time limit set forth in Federal Rule of Bankruptcy Procedure 3002.1(b).
Chase self-reported this issue to the USTP and the Independent Reviewer. As a result, the Parties have
modified the Settlement Agreement to require: (1) certain remediation to customers who received
untimely served PCNs; (2) operational enhancements to correct the processes that led to untimely service
and the accuracy of certificates of service; and (3) assessment and testing by the Independent Reviewer
to validate whether Chase has complied with the terms of the new agreement. See Stipulation for
Modification of Agreement, Exhibit A at 4-5.
The Independent Reviewer and Chase have negotiated and agreed on Validation Protocol 16—a
new testing protocol in addition to the original fifteen testing protocols—that sets the parameters for
testing the population of customers for whom PCNS were untimely served, the remediation provided to
these customers, and the efficacy of the operational enhancements. Like other testing protocols,
Validation Protocol 16 sets forth the agreed-upon error rates and other parameters for assessing whether
Chase passes or fails the testing that the Independent Reviewer has undertaken pursuant to the
Modification of Agreement.
The Independent Reviewer will continue to work with Chase and the BRG—which has conducted
the initial round of testing prior to the Independent Reviewer’s assessment—to resolve any questions or
issues arising in connection with this new testing. Pending the resolution of any issues, the Independent
Reviewer’s conclusion with respect to the new testable requirements under the Modification of
Agreement will be disclosed in her next report.
Supplemental Order Regarding the Misapplication of Pre-Petition Fees. In paragraph 100 of the
original Settlement Agreement, Chase and the USTP identified an issue with respect to the accuracy of
post-petition account statements for certain customers with home equity lines of credit (“HELOC”) whose
loans were serviced on VLS. This issue appeared to arise from a technological problem that caused certain
pre-petition fees to incorrectly appear as post-petition amounts owed. Chase had not resolved its internal
investigation into this issue at the time the Settlement Agreement was entered; however, since that time,
Chase has determined the technological cause of the problem and the scope of the resultant harm.
23
Chase determined that, in approximately November 2010, it began sending some of its customers
in Bankruptcy cases a bankruptcy information page that detailed certain post-petition amounts due from
those customers. This bankruptcy information page extracted data from VLS—Chase’s system of record
for HELOC loans. The VLS data was impacted by a new set of programming instructions implemented in
July 2010 that caused pre-petition fees (which are not collectible because of the automatic stay) to be
misapplied as post-petition amounts due (which are collectible) on the bankruptcy information page and
monthly statements. Chase corrected the errant programming instructions through technological
changes in April 2013; however, the issues were corrected only for Bankruptcy cases set up in Chase’s VLS
system after that date. Chase had to manually reconfigure all accounts that had been set up in Chase’s
bankruptcy template from July 2010 through April 2013. Chase achieved this reconfiguration in March
2015. After that time, Chase was able to identify all the accounts that were potentially impacted by the
errant programming instructions.
As a result, the Parties entered into the Supplemental Order, which requires: (1) certain
remediation to customers impacted by the misapplication of pre-petition fees; (2) operational
enhancements to prevent and catch similar computer programming errors in the future; and (3) testing
by the Independent Reviewer to validate the requirements of the Supplemental Order. See Supplemental
Order, Exhibit B at 5-6.
The Independent Reviewer and Chase have negotiated and agreed on Validation Protocol 17—a
new testing protocol in addition to the original fifteen testing protocols—that sets the parameters for
testing the population of customers impacted by the misapplication of pre-petition fees, the remediation
provided to these customers, and the efficacy of the operational enhancements to prevent and detect
similar programming issues going forward. Like other testing protocols, Validation Protocol 17 sets forth
the agreed-upon error rates and other parameters for assessing whether Chase passes or fails the testing
that the Independent Reviewer has undertaken pursuant to the Supplemental Order.
The Independent Reviewer will continue to work with Chase and the BRG—which has conducted
the initial round of testing prior to the Independent Reviewer’s assessment—to resolve any questions or
issues arising in connection with this new testing. Pending the resolution of any issues, the Independent
Reviewer’s conclusion with respect to the new testable requirements under the Supplemental Order will
be disclosed in her next report.
* * *
24
IV. CONCLUSION AND NEXT STEPS
As detailed above, the Independent Reviewer concluded that Chase has complied with its
obligations under paragraphs 30 and 60, paragraphs 47-49 and 53, subparagraph 92(a), and subparagraph
92(k) of the Settlement Agreement. The BRG has submitted its test results to the Independent Reviewer
in connection with paragraphs 54 and 57, 55 and 57, 50-53, 76-77, and 79. The submission of these BRG
test results completes the testing of the original testable requirements under the Settlement Agreement.
The BRG has also completed testing with respect to Chase’s compliance with the new testable
requirements under the Modified Order and Supplemental Order, which added two additional areas of
oversight to the Independent Reviewer’s purview. The BRG has submitted these new test results to the
Independent Reviewer, and she is currently engaged in her assessment of these new testable
requirements. Depending on the nature of the results of these tests, and any issues that arise during the
Independent Reviewer’s assessment, the Independent Reviewer will report her conclusions with respect
to these paragraphs in her next report.
* * *
25
EXHIBIT A

NORTHERN DIVISION-BAY CITY
In re:
DAVID S. BELZAK,

/
STIPULATION FOR MODIFICATION OF AGREEMENT EMBODIED IN ORDER

APPROVING SETTLEMENT BETWEEN THE UNITED STATES TRUSTEE
PROGRAM AND JPMORGAN CHASE BANK, N.A.
Daniel M. McDermott, the United States Trustee for Region 9, the Executive Office for
United States Trustees (EOUST), the United States Trustees and Acting United States Trustees
for Regions 1 through 21, and JPMorgan Chase Bank, N.A., by their respective counsel,
respectfully file this Modification of Agreement Embodied in Order Approving Settlement
Between the United States Trustee Program and JPMorgan Chase Bank, N.A.
DANIEL M. McDERMOTT K&L GATES LLP

UNITED STATES TRUSTEE
Region 9
By: /s/ Kelley Callard By: /s/ Phoebe Winder

Kelley.Callard@usdoj.gov Phoebe.Winder@klgates.com
Trial Attorney Attorney for JPMorgan Chase Bank, N.A.
Office of the U.S. Trustee State Street Financial Center
211 West Fort Street - Suite 700 One Lincoln Street
Detroit, Michigan 48226 Boston, Massachusetts 02111
(313) 226-6773 (617) 261-3100
[P68537] [Massachusetts BBO 567103]
Admitted in the Eastern District of Michigan
Dated: April 28, 2017 Dated: April 28, 2017
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EXHIBIT B

NORTHERN DIVISION-BAY CITY
In re:
DAVID S. BELZAK,

/
STIPULATION FOR ENTRY OF ORDER APPROVING SUPPLEMENTAL

SETTLEMENT BETWEEN THE UNITED STATES TRUSTEE PROGRAM AND
JPMORGAN CHASE BANK, N.A.
Daniel M. McDermott, the United States Trustee for Region 9, the Executive Office for
United States Trustees (EOUST), the United States Trustees and Acting United States Trustees
for Regions 1 through 21, and JPMorgan Chase Bank, N.A., by their respective counsel,
respectfully request that this Court enter the Order Approving Supplemental Settlement between
the United States Trustee Program and JPMorgan Chase Bank, N.A. A copy of the proposed
Order is attached.
DANIEL M. McDERMOTT K&L GATES LLP

UNITED STATES TRUSTEE
Region 9
By: /s/ Kelley Callard By: /s/ Phoebe Winder

Kelley.Callard@usdoj.gov Phoebe.Winder@klgates.com
Trial Attorney Attorney for JPMorgan Chase Bank, N.A.
Office of the U.S. Trustee State Street Financial Center
211 West Fort Street - Suite 700 One Lincoln Street
Detroit, Michigan 48226 Boston, Massachusetts 02111
(313) 226-6773 (617) 261-3100
[P68537] [Massachusetts BBO 567103]
Admitted in the Eastern District of Michigan
Dated: April 28, 2017 Dated: April 28, 2017
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EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION (BAY CITY)
In re: )
) Case No. 10-23963
David S. Belzak, ) Chapter 13
Lynda J. Belzak, )
) Hon. Daniel S. Opperman
Debtors. )
)
SUPPLEMENTAL ORDER APPROVING SETTLEMENT BETWEEN

THE UNITED STATES TRUSTEE PROGRAM AND JPMORGAN CHASE BANK, N.A.
RECITALS
Whereas, JPMorgan Chase Bank, N.A. (“Chase”) and the United States Trustee Program
(“USTP”) previously entered into a settlement regarding Payment Change Notices and the
administration of escrow accounts for mortgage loans,
Whereas, the settlement is reflected in a March 9, 2015 Order Approving Settlement

Between the United States Trustee Program and JPMorgan Chase Bank, N.A., in In re Belzak,
No. 10-23963-dob, Dkt. No. 143 (Bankr. E.D. Mich. Mar. 9, 2015) (“the PCN Order”),
Whereas, Paragraph 100 of the PCN Order states that there was an issue with certain
post-petition periodic account statements sent to certain customers in Bankruptcy with home
equity lines and loans serviced on a mortgage servicing platform, called “VLS,” used to service
Chase’s HELOC loan portfolio,
Whereas, Paragraph 100 of the PCN Order further states that at the time of entry of the
PCN Order Chase was still reviewing the nature of the issue, that Chase intended to provide
remediation to customers who paid more than they should have as a result of the issue, that the
PCN Order did not restrict the ability of the USTP to conduct further investigation or take other
steps related to the issue, and that the PCN Order did not settle, resolve, release, or prejudice any
claims against Chase and other Account Statement Released Parties (defined below) related to
this issue,
Whereas, Chase and the Executive Office for United States Trustees (the “EOUST”) have
engaged in discussions concerning account statements sent to Chase borrowers with information
drawn from Chase’s VLS platform,
Whereas, as a result of their discussions, the Parties have reached an agreement to

supplement the PCN Order to resolve the issue that remained open in Paragraph 100 as set forth
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in this Supplemental Order Approving Settlement Between the United States Trustee Program
and JPMorgan Chase Bank, N.A.,
Whereas, in consideration of the foregoing, and of the mutual promises and compromises
between them, the EOUST and the United States Trustees and Acting United States Trustees for
Regions 1 through 21 (collectively “the United States Trustee Program” or “USTP”), and Chase
(Chase and USTP are collectively referred to here as the “Parties”) do hereby agree, stipulate and
consent to the Court’s entry of this Supplemental Order Approving Settlement Between the
United States Trustee Program and JPMorgan Chase Bank, N.A., and the Court otherwise being
fully advised of its premises,
ACCORDINGLY, IT IS ORDERED AS FOLLOWS:
ARTICLE I
JURISDICTION AND VENUE
1. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. §
1334(b). This is a core proceeding under 28 U.S.C. § 157(b)(2). Venue in the United States
Bankruptcy Court for the Eastern District of Michigan is proper pursuant to 28 U.S.C. § 1409(a).
ARTICLE II
DEFINITIONS
2. Capitalized terms used in this Supplemental Order but not defined in this Article
are defined in the PCN Order or elsewhere in this Supplemental Order.
3. “Account Statement Covered Conduct” shall mean
a. The accuracy and communication of amounts owed by Chase customers

on HELOC loans that are reflected on periodic statements during the VLS
Relevant Period; and
b. The adequacy of Chase’s policies and procedures concerning the accuracy

and communication of amounts owed by Chase customers on HELOC
loans that are reflected on periodic statements during the VLS Relevant
Period.
4. “Supplemental Order Effective Date” shall mean the date upon which any appeal
period has run following the execution of this Supplemental Order by the Parties and its entry by
the Court.
5. “Incorrectly Billed Pre-Petition Amounts” shall mean fees that were incurred
prior to filing of a bankruptcy petition and that were reflected in the Post-Petition Payment
Amount Field on the bankruptcy information page of a periodic statement as though they were
post-petition amounts.
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6. “Account Statement Released Parties” shall mean JPMorgan Chase Bank, N.A.;
Chase Home Finance, LLC; Chase Bank USA, N.A.; Chase Manhattan Mortgage Corp.; Chase
Mortgage Services, Inc.; EMC Mortgage Corporation; EMC Mortgage Company LLC; JPMC
Specialty Mortgage LLC; Washington Mutual Bank, FA; and Washington Mutual Home Loans,
Inc., and any of their respective corporate successors or assigns, whether acting on their own
behalf or as servicer or agent for a third party.
7. “VLS Programming Error” shall mean the element of the coding instructions
installed into the VLS system in July 2010 that caused incorrect amounts to appear for the post-
petition payment amount and / or the total amount due on the periodic statements of certain
accounts during the VLS Relevant Period.
8. “VLS Relevant Period” shall mean the period from July 1, 2010 through March
31, 2015.
ARTICLE III
FACTS
Without waiving any privilege, Chase represents that the following facts are accurate to
the best of its knowledge and belief:
9. Chase maintains information regarding its mortgage banking customers and their
accounts on a number of different systems of record. These systems both maintain information
and automate certain processes, thereby increasing efficiency and reducing errors. For Home
Equity Line of Credit mortgage lines and loans (“HELOC loans”), the mortgage servicing
platform that Chase used at all times during the VLS Relevant Period was called “VLS.”
10. The VLS system performs a number of functions related to the servicing of
HELOC loans. Among other things, VLS keeps track of account balances, amounts paid, and
fees imposed. When Chase sends HELOC loan customers their periodic account statements,
information in those statements regarding such balances, amounts paid, and fees imposed is
drawn from the VLS system. When HELOC loan customers are in bankruptcy proceedings,
accounts are set up in the bankruptcy module of VLS and VLS applies a set of pre-programmed
rules to distinguish pre-petition amounts that are subject to the automatic bankruptcy stay from
amounts which are properly collectible on an ongoing basis post-bankruptcy; that is, VLS is
programmed to calculate pre-petition arrears and post-petition payments separately.
11. In July 2010, a new set of programming instructions was installed onto Chase’s
VLS system. That set of instructions was in place until April 6, 2013.
12. Beginning in November 2010 of the VLS Relevant Period, the periodic account
statements that Chase sent to customers in Bankruptcy Cases included a bankruptcy information
page. The bankruptcy information page, which was not required by law or statute to be provided
to the customer and was intended to be informational in nature only, included a “post-petition
payment amount,” which was to reflect the periodic payment amount due post-petition, and a
“total amount due,” which was to reflect all post-petition payments due as of the date of the
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statement. Redacted copies of two exemplar periodic account statements for borrowers in
bankruptcy are attached hereto as Exhibit 1.
13. During the VLS Relevant Period, an error in the new programming instructions
caused Incorrectly Billed Pre-Petition Amounts to appear on the periodic account statements of
some customers in Bankruptcy Cases with accounts that had been set up in the VLS system
during the VLS Relevant Period. Specifically, in some cases, the VLS Programming Error
erroneously treated amounts that were incurred prior to filing of the bankruptcy petition as
though they were post-petition amounts.
14. The VLS Programming Error caused Incorrectly Billed Pre-Petition Amounts to
be added into and reflected in the “post-petition payment amount” and “total amount due” fields
on the bankruptcy information page of some periodic account statements.
15. As a result of the VLS Programming Error, some customers in Bankruptcy Cases
during the VLS Relevant Period received periodic account statements that contained the
Incorrectly Billed Pre-Petition Amounts on the bankruptcy information page of their statement.
Not all customers in Bankruptcy Cases during the VLS Relevant Period received periodic
account statements that contained the Incorrectly Billed Pre-Petition Amounts.
16. While Chase periodic statements are often several pages long, the VLS
Programming Error affected only the bankruptcy information page and did not affect other pages
of the periodic account statement. The amount due that was stated on the first page of the
periodic account statement was not affected by the VLS Programming Error and stated the
correct amount due.
17. The VLS Programming Error did not affect the accuracy of the PCNs that were
the subject of the PCN Order.
18. The VLS Programming Error did not affect the accuracy of information that was
included in declarations prepared by Chase.
19. The VLS Programming Error was corrected on April 6, 2013, when the VLS code
was updated with corrected programming instructions. Accounts that were set up for bankruptcy
after April 6, 2013 were not affected by the VLS Programming Error.
20. Errors in accounts set up for bankruptcy from July 1, 2010 to April 6, 2013 of the
VLS Relevant Period were not corrected by the implementation of corrected programming
instructions on April 6, 2013. Those accounts continued to be subject to the VLS Programming
Error through March 2015, when Chase re-set up those accounts in bankruptcy with corrected
programming instructions.
21. Chase has identified approximately 6,441 accounts (the “VLS Remediation
Population”) who could have received a post-petition statement that contained a bankruptcy
information page reflecting Incorrectly Billed Pre-Petition Amounts. However, not all of the
6,441 accounts in the VLS Remediation Population received a post-petition statement and not all
accounts in the VLS Remediation Population received a post-petition statement with Incorrectly
Billed Pre-Petition Amounts. To avoid protracted reviews and to ensure that remediation was
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provided to borrowers expeditiously, the remediation population was defined in a comprehensive
and inclusive fashion to ensure that all impacted and potentially impacted accounts would
receive remediation.
22. More than half of the customers in the VLS Remediation Population made no
payments to Chase at all after receiving one or more periodic account statements that may have
included Incorrectly Billed Pre-Petition Amounts. In addition, and unrelated to the VLS
Programming Error, as of April 1, 2016, Chase has also forgiven the outstanding principal
balances and other fees and charges on the HELOCs of approximately 2,000 customers in the
VLS Remediation Population.
23. Based on Chase’s review of a statistically significant sample of the VLS

Remediation Population, the mean amount of Incorrectly Billed Pre-Petition Amounts (in the
aggregate, i.e., for each consumer, the sum of all Incorrectly Billed Pre-Petition Amounts on all
statements they might have received) was approximately $165.
ARTICLE IV
OPERATIONAL ENHANCEMENTS
24. The VLS Programming Error was corrected for newly-filed bankruptcies on April
6, 2013, when the VLS code for the setup of HELOC accounts was updated with corrected
programming instructions.
25. The bankruptcy technology platform is built on a combination of vendor packages

and in-house applications. Releases from vendors are scheduled more than four months in
advance, and internal changes are scheduled quarterly. The VLS Programming Error for
bankruptcy accounts set up from July 1, 2010 to April 6, 2013 was corrected, by re-setting up
those accounts in bankruptcy, no later than March 31, 2015. The technology enhancements to
the VLS system included three layers of testing, performed before and after the technology build,
to help ensure that the enhancements performed as expected without adverse customer
impact. These layers included: (a) application testing by the developers; (b) a full suite of
functional and regression tests by a Quality Assurance team, which is an independent function
from development; and (c) validation testing by Mortgage Banking. For any future bankruptcy
technology releases, Chase expects to use a similar multi-layered testing approach.
ARTICLE V
CORRECTIVE ACTION AND INDEPENDENT REVIEW
26. Chase will pay each of the approximately 6,441 accounts in the VLS Remediation
Population the sum of $300 (as set forth in Paragraph 37), on a per-account basis.
27. The Independent Reviewer’s compliance responsibilities under the PCN Order are
expanded to include the Account Statement Covered Conduct and corrective action, including
undertaking additional assessments as set forth below. The Independent Reviewer shall report
on the Account Statement Covered Conduct issues as set forth in the PCN Order.
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28. The Independent Reviewer and Chase shall negotiate the terms of additional
provisions and/or modifications to the Work Plan and Retention Agreement, if necessary, that
provide for the additional compliance responsibilities relating to the Account Statement Covered
Conduct issues, including the additional assessments set forth in Paragraph 29. In her discretion,
the Independent Reviewer may retain additional professionals if necessary to perform her
additional responsibilities relating to the Account Statement Covered Conduct.
29. In addition to her assessments under Paragraph 92 of the Order the Independent
Reviewer shall assess:
a. Whether the VLS Remediation Population is substantially accurate by

conducting a review of post-petition account statements for borrowers in
bankruptcy during the VLS Relevant Period utilizing a sampling
methodology (including, for the avoidance of doubt, reviewing that
Chase’s determination of the number of the VLS Remediation Population
includes all borrowers impacted by Incorrectly Billed Pre-Petition
Amounts);
b. Whether Chase has timely fulfilled all affirmative obligations set forth in
Paragraph 26 of this Supplemental Order and; and
c. Whether Chase’s post-petition HELOC account statements provided to

borrowers in bankruptcy subsequent to the VLS Relevant Period no longer
contain Incorrectly Billed Pre-Petition Amounts and are otherwise
accurate and complete by conducting a review of a sample of such post-
petition account statements sent to borrowers in bankruptcy subsequent to
the VLS Relevant Period.
30. The Independent Reviewer’s assessment under this Supplemental Order is limited
to the three items in Paragraph 29.
31. Chase shall complete all affirmative actions under this Supplemental Order within
60 days of the Supplemental Order’s Effective Date, unless a later date is agreed to by the parties
in writing. The deadline for completing the assessments set forth in Paragraph 29 shall be 180
days from Effective Date of the Supplemental Order.
32. All other provisions of Article XII of the PCN Order shall continue to apply. The
Independent Review shall be extended as necessary and shall conclude when the Independent
Reviewer has completed and filed an assessment under either Paragraph 93 or 94 of the Order for
each of the Sub-Paragraphs of Paragraph 92 of the Order and the additional assessments required
in Paragraph 29 herein.
33. The additional duties and responsibilities of the Independent Reviewer set forth
herein are intended to supplement, not supersede, the Independent Reviewer’s existing retention,
duties, and authorities set forth under the Order.
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ARTICLE VI
RELEASE
34. Upon the Supplemental Order Effective Date, the USTP consents and agrees to
fully and finally release any claims, and will refrain from instituting, directing or maintaining
any contested manner, adversary proceeding or participating in any contested matter or adversary
proceeding by a third party (except that the United States Trustees may participate in an action to
the extent ordered by a court provided that the United States Trustees may not seek such a court
order formally or informally), against the Account Statement Released Parties, individually and
collectively, pertaining to the Account Statement Covered Conduct.
35. The Account Statement Released Parties consent and agree to fully and finally
release the USTP and its current and former employees from claims under the Equal Access to
Justice Act, 28 U.S.C. § 2412, based on the USTP’s investigation and prosecution of the Account
Statement Covered Conduct.
36. For the avoidance of doubt, as with other provisions of the PCN Order, all
applicable provisions contained in Article XIII of the PCN Order remain in full force and effect
with respect to this Supplemental Order.
ARTICLE VII
MISCELLANEOUS PROVISIONS
37. Any payments required to be made under this Supplemental Order shall be
deemed made when deposited in the United States mail, postage prepaid and addressed to the last
known notice address for a loan or when transmitted electronically to the recipient. Any payee’s
failure or refusal to accept such payment shall not be deemed a breach of Chase’s obligations
under this Supplemental Order. Upon request, Chase shall reissue a check that the payee failed
to timely negotiate provided that such request is in writing and received within 180 days of the
Effective Date of this Order.
38. For the avoidance of doubt, as with other provisions of the PCN Order, all
applicable provisions contained in Article XIV of the PCN Order remain in full force and effect
with respect to the Supplemental Order.
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Home Equity Line Of Credit Statement
Line Information as of 08-05-16
News You Can Use

Please refer to the bankruptcy information in this statement for more information relating to your case.
To the extent your original obligation was discharged, or is subject to an automatic stay of bankruptcy under
Title 11 of the United States Code, this statement is for compliance and/or informational purposes only and
does not constitute an attempt to collect a debt or to impose personal liability for such obligation. If your
Plan requires you to make post-petition mortgage payments directly to the Trustee, any such payments
should be remitted to the Trustee directly in accordance with the orders of the Bankruptcy Court.
For questions about your account, please call a Chase Bankruptcy Support Specialist at 1-866-243-5851,
Monday through Friday, from 7:00 a.m. to 7:00 p.m. Central Time.
To Contact Us:
**This is not a payoff amount. Please contact us to request a payoff quote.
Activity Since Your Last Statement

Post Date Description Payments/ Debits/ Principal Balance
Credits Advances/Fees After Transaction
ANNUAL PERCENTAGE RATE
FINANCE CHARGE
Total
The information on this page is contractual. Please refer to the bankruptcy information page included
with this statement for additional information on your account.
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0000036 Page 2 of 6
More News You Can Use

Please Note: This statement is not a request for payment. It is for informational purposes only. However, if you elect
to make a payment, you may use the coupon attached to the bankruptcy page within this statement.
If you choose to make a payment via overnight mail, please use the following address: Chase, Attn: OH4-7126, 3415
Vision Drive, Columbus, OH 43219.
Servicemember Protections : If you're a U.S. Military Veteran, an active-duty Servicemember or a dependent of a

Veteran or Servicemember, you may be eligible to lower the interest rate for your home equity loan based on the
Servicemembers Civil Relief Act (SCRA), similar state law benefits and/or Chase programs. If you want to learn more
about lowering your payment or interest rate or if you have any questions, please call us at 1-877-469-0110,
1-318-340-3308 if you're calling from overseas, or 1-800-582-0542 for TTY services.
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0000036 Page 3 of 6
BILLING INQUIRIES LOST OR STOLEN CHECKS OR CARDS

For billing inquiries, write to: CHASE Please report your lost or stolen checks or cards immediately by
ATTN: HOME EQUITY LOAN SERVICING P.O. BOX 24714 calling Customer Care.
COLUMBUS, OH 43224.
INSURANCE
CUSTOMER CARE Please note that you may update your insurance information online at
For all inquiries Customer Care is available Monday - Friday, www.mycoverageinfo.com. When you are prompted, please use PIN
8:00 AM - 12:00 AM (midnight) Eastern Time, Saturday, 8:00 number CM6022.
AM - 8:00 PM, Eastern Time and can be reached by phone at
(800) 836-5656 or for the hearing impaired at BILLING RIGHTS SUMMARY

(800) 582-0542 (TTY). In case of Errors or Questions About your Bill: If you think your
bill is wrong, or if you need more information about a
Send Qualified Written Requests to: Chase, PO Box 183166 transaction on your bill, write us as soon as possible on a
Columbus, OH 43218-3166 separate sheet at the address listed in the Billing Inquires
section on this page. We must hear from you no later than 60
PERIODIC FINANCE CHARGE CALCULATION days after we sent you the first bill on which the error or
How your periodic FINANCE CHARGE is calculated: Each day problem occurred. You can telephone us, but doing so will not
of the statement period, the principal balance is multiplied by preserve your rights.
the daily periodic rate to obtain the daily periodic interest
charge. The daily charges for each day in the statement period In your letter give us the following information:
are added to calculate your statement finance charge. The daily 1. Your name and account number.
periodic rate may vary. 2. The dollar amount of the suspected error.
3. A description of the error. Explain if you can, why you
EXPLANATION OFANNUAL PERCENTAGE RATE believe there is an error. If you need more information,
“ANNUAL PERCENTAGE RATE” (APR)is an expression of describe the item you are unsure about.
the daily periodic rate as an annualized percentage rate, and 4. Your signature and the date.
does not include fees.

You do not have to pay any amount in question while we are
investigating, but you are still obligated to pay the parts of your
EXPLANATION OF EFFECTIVE ANNUAL PERCENTAGE
bill that are not in question. While we investigate your question,
RATE
we cannot report you as delinquent or take any action to collect
If an EFFECTIVE ANNUAL PERCENTAGE RATE appears on
the amount you question.
your statement, that figure represents your total FINANCE
CHARGE (including transaction fees such as modification fees,

lock cancellation fees and extension fees) on your entire
Special Rule for Credit Card Purchases: If you have a problem
with the quality of goods or services that you purchased with a

account balance, expressed as an annualized percentage.
credit card, and you have tried in good faith to correct the
problem with the merchant, you may not have to pay the
REPORTING TO CREDIT BUREAUS
remaining amount due on the goods or services. You have this
We may report information about your account to credit
protection only when the purchase price was more than $50
bureaus. Late payments, missed payments, or other defaults on
and the purchase was made in your home state or within 100
your account may be reflected in your credit report.
miles of your mailing address. (If we own or operate the
merchant, or if we mailed you the advertisement for the

PAYOFF AND ACCOUNT CLOSURE INFORMATION
property or services, all purchases are covered regardless of
The ending principal balance on the reverse side of your
the amount or the location of the purchase.)
statement is not the amount to send if you want to pay your
account in full. To obtain a current payoff quote, please contact
us by telephone at our Customer Care number above.
IMPORTANT BANKRUPTCY INFORMATION Please be advised, when you provide your telephone contact
If you or your account are subject to pending bankruptcy information, including cell phone numbers, the bank will interpret that
proceedings, or if you received a bankruptcy discharge, this as granting express consent to contact you at this number regarding
statement is for informational purposes only and is not an
this loan, including but not limited to, autodialed calls and leaving
attempt to collect a debt.
pre-recorded messages. If you do not wish to be contacted at a
certain number, please contact us at any time to withdraw such
CREDITING OF PAYMENTS
Your payment is due on the date noted in your account
consent. We will notate your account to only call you manually via a
summary. For purposes of calculating FINANCE CHARGES, live representative or, at your request, remove that number from our
payments will be credited on the day we receive them if the
system.
payment is received by 5:00 PM in the time zone in which the
mailing address on your payment coupon is located and if (a)

CHASE COMMONLY IMPOSED FEES*
the payment is received on Monday through Friday except for
Insufficient Funds $25**
legal holidays observed in the processing center, (b) the
Credit Line Stop Payment Fee $20**
payment is received at the address shown on your payment
Credit Line Overlimit Fee $25**
coupon, (c) your payment is made with a check or money order
drawn on a US bank in US dollars, (d) the attached payment

* This fee table includes some of the more common fees charged but
coupon is enclosed with your payment, and (e) your payment is
does not contain all fees that may be provided for in your loan
sent in the enclosed return envelope. Credit for payments made
documents or by applicable law or that may be charged for services
in any other manner may be delayed up to five (5) days during
rendered. Fee structure is subject to change without prior notice
which time FINANCE CHARGES will continue to accrue.
except where required by law.
Please allow five to seven (5 - 7) days for payments to reach the
payment address. Please do not send cash through the mail.
** Fees may not be applicable on certain products or if limited by state
Please include your account number and name on the front of
law.
your check or money order. Do not staple, tape or paper clip
your payment to your payment coupon. If you dispute the
amount you owe us and you send payment for less than the
amount we believe you owe us, we do not lose any of our rights
and the payment will not satisfy what you owe us or operate as
an accord and satisfaction unless you send that amount to
CHASE ATTN: HE PAYMENT RESEARCH PO BOX 24714
COLUMBUS, OH 43224 and it is approved by the appropriate

officer.
SPEEDPAY
Speedpay is a quick and convenient payment option. Make sure
your payment is made on time, and avoid late fees with one
simple phone call. Speedpay payment requests received after
8:00 PM ET will be processed the next business day. To use

this service, call Customer Care at the phone number provided
on this statement. Please be aware that by using our
automated payment system you authorize Chase to
automatically debit the payment amount from your bank
account. We may place a "credit hold" on the portion of your

payment that is applied to principal to allow sufficient time for
the funds to clear from your bank account. During the credit
hold period, this portion of your payment is not available for
additional advances.
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0000036 Page 4 of 6
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BANKRUPTCY INFORMATION
CONTACT INFORMATION
Bankruptcy Customer Care Phone:
PAYMENT SUMMARY
Bankruptcy Status: ACTIVE BANKRUPTCY
POST PETITION ACCOUNT INFORMATION
* This is your Principal Balance only, not the amount required to pay your loan in full.
Year-to-Date-Account-Activity
ACCOUNT STATEMENT IS FOR INFORMATION PURPOSES ONLY

IMPORTANT MESSAGES
To the extent your original obligation was discharged, or is subject to an automatic stay of bankruptcy
under Title 11 of the United States Code, this statement is for compliance and/or informational purposes
only and does not constitute an attempt to collect a debt or to impose personal liability for such
obligation. If your Plan requires you to make post-petition mortgage payments directly to the Trustee,
any such payments should be remitted to the Trustee directly in accordance with the orders of the
Bankruptcy Court.
LAST POST PETITION PAYMENT BREAKDOWN

Post-Petition Interest Rate Principal Interest Escrow Total
Due Date Post-Petition
Payment
Please detach and return the bottom portion of this statement with your payment using the enclosed windowed envelope.
Payment Coupon Home Equity Line Of Credit

Account Number
Check box if address has changed; indicate changes on reverse side.
Next Due Date 09-01-16
Please make check payable to Chase.
Payment Due
- Write your account number on your check; include coupon with payment.
Amount Enclosed
CHASE
P.O. BOX 9001020
LOUISVILLE, KY 40290-1020
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Has your mailing address or phone number changed?

If so, please update your information online at chase.com, where you can also view your recent account activity. Alternatively, you may check the box on
the front of this payment coupon and fill in the correct information below.
When you give us your mobile phone number, we have your permission to contact you at that number about all your Chase or J.P. Morgan accounts.
Your consent allows us to use text messaging, artificial or prerecorded voice messages and automatic dialing technology for informational and
account service calls, but not for telemarketing or sales calls. It may include contact from companies working on our behalf to service your accounts.
Message and data rates may apply. You may contact us anytime to change these preferences.
Borrower Name Borrower Cell Phone
Borrower Name Borrower Cell Phone
Street Address Home Phone
Street Address Business Phone
City State ZIP
Email Address
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Deaf or Hard of Hearing (TTY) (800) 582-0542
Loan Overview Home Equity Loan Statement
Total Amount Due

Payment Due Date 09/01/2016
Past Payments Breakdown Explanation of Payment Amount

Paid Since Last Statement Paid Year-to-Date
Monthly Payment
Fees/Charges
Total Past Due Amount
Total Amount Due
Transaction Activity Since Your Last Statement (Includes Fees/Charges)

Post Date Description Charges/ Payments/ Balance Subject to
Fees Credits a Finance Charge
Important Messages
To the extent your original obligation was discharged,or is subject to an automatic stay of bankruptcy under
Title 11 of the United States Code,this statement is for compliance and/or informational purposes only and does
not constitute an attempt to collect a debt or to impose personal liability for such obligation. If your Plan requires
you to make post-petition mortgage payments directly to the Trustee,any such payments should be remitted to
the Trustee directly in accordance with the orders of the Bankruptcy Court. However,a secured party retains
rights under its security instrument,including the right to foreclose its lien.
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Billing Inquiries Paid Ahead
Customer Service Inquiries:
Exclusive Address for Notices of Error,Information

Requests,and Qualified W ritten Requests: Important Bankruptcy Information
Reporting to Credit Bureaus

Insurance
Payoff
Homeowner Assistance
Payment Information
Automatic payments—
By mail or in person— Request for Mortgage Assistance

Chase
P.O. Box 469030
Chase Speedpay— Glendale,CO 80246
Crediting of Payments
Late Charges
Payment Coupon Total Fees and Charges Chase Commonly Imposed Fees
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Home Equity Loan Statement
Loan Number
Important Messages
Servicemember Protections:
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Home Equity Loan Statement
ACCOUNT STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY
Account Information Bankruptcy Information
Year-to-Date Payments
Post-Petition Account Information
Total
Contact Information
Bankruptcy Customer Service 1- (866) 520-6447
Send correspondence only to:
Important Messages
To the extent your original obligation was discharged,or is subject to an automatic stay of bankruptcy
under Title 11 of the United States Code,this statement is for compliance and/or informational
purposes only and does not constitute an attempt to collect a debt or to impose personal liability for
such obligation. If your Plan requires you to make post-petition mortgage payments directly to the
Trustee,any such payments should be remitted to the Trustee directly in accordance with the orders
of the Bankruptcy Court. However,a secured party retains rights under its security instrument,
including the right to foreclose its lien.
Post-Petition Interest Rate Principal Interest Escrow Total

Payment Date Post-Petition
Payment
Payment Coupon Home Equity Loan
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Has your mailing address or phone number changed? Account Number
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Belzak Matter 10-23963 Doc 159 Monitor's 4th Report As To JPMC

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Belzak Matter 10-23963 Doc 159 Monitor's 4th Report As To JPMC

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UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

Debtors. Hon. Daniel S. Opperman

DECLARATION OF AMY WALSH IN SUPPORT OF THE FOURTH REPORT

I, Amy Walsh, Esq., declare as follows:

Dated: January 31, 2018

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Fourth Report by the Independent Reviewer

January 31, 2018

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II. SUMMARY OF PRIOR REPORTS

Overview of Subparagraphs 92(a). Subparagraph 92(a) of the Settlement Agreement requires

IV. CONCLUSION AND NEXT STEPS

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Debtors. Hon. Daniel S. Opperman

STIPULATION FOR MODIFICATION OF AGREEMENT EMBODIED IN ORDER

respectfully file this Modification of Agreement Embodied in Order Approving Settlement

DANIEL M. McDERMOTT K&L GATES LLP

By: /s/ Kelley Callard By: /s/ Phoebe Winder

Dated: April 28, 2017 Dated: April 28, 2017

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Debtors. Hon. Daniel S. Opperman

STIPULATION FOR ENTRY OF ORDER APPROVING SUPPLEMENTAL

DANIEL M. McDERMOTT K&L GATES LLP

By: /s/ Kelley Callard By: /s/ Phoebe Winder

Dated: April 28, 2017 Dated: April 28, 2017

SUPPLEMENTAL ORDER APPROVING SETTLEMENT BETWEEN

Whereas, the settlement is reflected in a March 9, 2015 Order Approving Settlement

Whereas, as a result of their discussions, the Parties have reached an agreement to

ACCORDINGLY, IT IS ORDERED AS FOLLOWS:

JURISDICTION AND VENUE

3. “Account Statement Covered Conduct” shall mean

a. The accuracy and communication of amounts owed by Chase customers

b. The adequacy of Chase’s policies and procedures concerning the accuracy

23. Based on Chase’s review of a statistically significant sample of the VLS

25. The bankruptcy technology platform is built on a combination of vendor packages

CORRECTIVE ACTION AND INDEPENDENT REVIEW

a. Whether the VLS Remediation Population is substantially accurate by

c. Whether Chase’s post-petition HELOC account statements provided to

Line Information as of 08-05-16

News You Can Use

**This is not a payoff amount. Please contact us to request a payoff quote.

Activity Since Your Last Statement

ANNUAL PERCENTAGE RATE

with this statement for additional information on your account.

More News You Can Use

Vision Drive, Columbus, OH 43219.

Servicemember Protections : If you're a U.S. Military Veteran, an active-duty Servicemember or a dependent of a

1-318-340-3308 if you're calling from overseas, or 1-800-582-0542 for TTY services.

BILLING INQUIRIES LOST OR STOLEN CHECKS OR CARDS

8:00 AM - 12:00 AM (midnight) Eastern Time, Saturday, 8:00 number CM6022.

AM - 8:00 PM, Eastern Time and can be reached by phone at

(800) 836-5656 or for the hearing impaired at BILLING RIGHTS SUMMARY

section on this page. We must hear from you no later than 60

the daily periodic rate to obtain the daily periodic interest

3. A description of the error. Explain if you can, why you

does not include fees.

CHARGE (including transaction fees such as modification fees,