Case 1:15-cv-00293-LTS-JCF Document 191-14 Filed 06/15/17 Page 1 of 6

EXHIBIT 14
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Perki~
Coie
30 Rockefeller Plaza, 22nd Floor
New York, NY 10112-0085
Gary F. Eisenberg
PHONE: 212.262.6900
PHONE· (2 J2) 262-6902
FAX: 212.977-1649
FAX: (2)2) 977-16)2
EMAIL GEiscnberg@pcrkinscoic.com www.perklnscolc.com

June 27, 2014

VIA EMAIL & REG. MAIL

JPMorgan Chase Bank, N.A.

23 7 Park Avenue, 13th Floor
New York, NY 10017
Attn: Robert Bailey, Esq.

Re: Follow-Up Letter Regarding Systematic and Ongoing Abuse of Mortgage

Resolution Servicing, LLC, 1st Fidelity Loan Servicing, LLC and S & A Capital
Partners, Inc. by JPMorgan Chase Bank, N.A., Chase Home Finance LLC and
Affiliates (collectively, "JPMC")

Dear Mr. Bailey:

As you know from our Jetter dated March 5, 2014 (the "Initial Letter") (copy attached for your
convenience), our office represents Mortgage Resolution Servicing, LLC ("MRS"), 1st Fidelity
Loan Servicing, LLC ("1st Fidelity") and S & A Capital Partners, Inc. ("S & A") (collectively
the "Schneider Entities").

As you also know, in response to JPMC's request to provide additional supporting materials
relating to the substantial claims we addressed in the Initial Letter, we made available to
Christopher Catalano, Esq., one of your colleagues, for review and inspection, several binders of
documents that further explained and substantiated the Schneider Entities' claims and their
massive scope and breadth. We also provided an oral road map explanation of additional
materials included in the binders he reviewed that were not in the binder that Mr. DiMarco and I
had with us when you visited our offices in March.

Mr. Catalano, after receiving the road map explanation and reviewing the information we
provided, requested a further summary of claims and demands in addition to what we set forth in
the Initial Letter. I write to summarize the Schneider Entities' position at this time and to
provide JPMC with the formal demand it has requested.

LEGAL\20791115.6
ANCHORAGE· BEIJ I NG · BELLEVUE BOISE· CHICAGO · DALLAS· DENVER LOS ANGELES · MAOISON . NEW YORK
PALO ALTO · PHOENIX · PORTLANO · SAN DIEGO · SAN FRANCISCO SEATTLE· SHANGHAI · TAIPEI WASHINGTON, D . C.

Perkins Coie LLP

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JPMorgan Chase Bank, N .A.

June 27, 2014
Page2

Certain developments have come to the attention of the Schneider Entities that suggest that the
scope of JPMC's liabilities may be even more extensive than initially concluded as set forth in
the Initial Letter. At the same time, nothing has occurred that undermines the position we set
forth in our Initial Letter.

Record-Keeping Militates Liability

As you will recall, in the Initial Letter, we summarized the various actions by JPMC that
demonstrate JPMC's liability to the Schneider Entities. JPMC claims that it has commenced an
investigation into the allegations set forth in the Initial Letter, however, such investigation has
not yet yielded any set of facts that would mitigate JPMC's liability. Indeed, you will recall that
you informed us that JPMC's initial investigation had not even produced a copy of the signed
MLPA.

Based on discussions with and requests by your office, the investigation thus far clearly
demonstrates that JPMC's record keeping methods significantly militate the causes of its
liability. Given that JPMC has admitted that it cannot find documents that lie at the center of this
matter, the clearer it becomes that a settlement is of great value to JPMC.

Washington Mutual Purchase A Motive For MLPA

There is considerable evidence that JPMC made an intentional and concerted effort to pass
thousands of liability-ridden loans on to the Schneider Entities. A primary purpose of the
transfer pursuant to the MLPA was to "scrub" JPMC's actions relating to its ownership and
servicing of residential mortgage loans in anticipation of its purchase of Washington Mutual
pursuant to contract of sale dated September 25, 2008. By the time of the Washington Mutual
proposed sale, JPMC had come to realize that its own practices mimicked those that drove the
EMC/Bear Stearns settlement on September 8, 2008.

These loan practices completely fail to meet the warranties and representations under the MLP A.
In addition, and at the heart of JPMC's motive to enter into the MLPA, those loans fail to meet
statutory obligations on multiple levels, contrary to JPMC's similar warranties and
representations in its own purchase agreement with the federal government. Those breaches are
self-evident.

RCVJSOR

JPMC's record keeping issues, caused in part by its improper servicing ofloans hidden within its
RecoveryOne ("RCV l ") System of Records (SOR) and its serial use of collection agencies,
continued to corrupt thousands of loans, including loans owned by the other Schneider Entities.

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JPMorgan Chase Bank, N.A.

June 27, 2014
Page 3

JPMC's failure to correct these practices, after the MLPA loans were "cleared" from JPMC's
books, then led to JPMC's additional breaches against S&A and 1st Fidelity.

Additional Harms

All of these acts have been detailed in the Initial Letter. They characterize an enterprise that
continues to harm the Schneider Entities.

Adding to this already egregious conduct, and upon the disclosure of the False Claims case
brought by Mr. Schneider in South Carolina Federal Court, JPMC sought to harm the Schneider
Entities financially by intentionally discharging hundreds of liens owned by the Schneider
Entities, on loans that JPMC neither owned nor serviced. This is a direct violation of Mr.
Schneider's rights as a whistleblower. The Schneider Entities anticipate spelling these and
potentially additional allegations out further in their anticipated amended complaint and
whistleblower protection litigation.

Ongoing Harms; Demand for Cessation of Further Harms

The scope of harm caused by these actions is mushrooming. The intentional discharge of the
liens is impacting the Schneider Entities• enforcement of loans previously sold to them.
Servicers acting on behalf of the Schneider Entities have learned in the course of their
performance of their services of some of these lien releases. Those servicers have expressed
concerns that these filings may give rise to liability to them and to the Schneider Entities whose
loans they service, potentially under consumer protection laws, laws relating to the integrity of
the filing of recorded documents and common law relating to slander of title. These liabilities
will remain risks for the Schneider even if JPMC undertakes to "revive" recordings of the liens
whose releases JPMC recorded.

The lien releases have become known to at least one third-party servicer whose services the
Schneider Entities utilize. That servicer has notified the Schneider Entities that the servicer is
obligated to report these lien releases and potential violations of consumer protection laws to the
Consumer Financial Protection Bureau. This is likely to compound the scope of liabilities
arising from the lien releases. Though cessation of lien releases and other interference with the
Schneider Entities' loans going forward will not cure previous liabilities, such cessation is likely
to avert compounding of those liabilities, and thus the Schneider Entities demand that JPMC
immediately cease and desist from any and all further actions with respect to lien releases
relating to any of the Schneider Entities' loans.

In summary, the JPMC enterprise's continued bad acts, breaches of agreements, deceptive
business practices, interferences with the business and property of the Schneider Entities,
violations of federal laws including regulations under the Dodd-Frank Act and failure to provide

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JPMorgan Chase Bank, N.A.

June 27, 2014
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appropriate tax records to borrowers, ignorance of the contractual rights of the Schneider Entities
and obvious lack of any record-keeping integrity all demonstrate that JPMC cannot, with even
the lowest JeveJ of certainty, provide assurances that it will cease its harmful behavior. The
reason is plain -- JPMC has no control over its data and it is reasonable for our client to expect
that JPMC will continue its malfeasance.

Offer for Resolution

Based on these facts, my cJients are willing to resolve their business issues with JPMC by JPMC
paying the full face value of all loans currently owned by the Schneider Entities, less sums
actually received and retained by the Schneider Entities on account of servicing of those loans.
As you may know, the full face value of all loans currently owned by the Schneider Entities is
$256 million. This settlement (the "Loan Sales Settlement") would not include any issues
related to the NMSA False Claims Act matter currently pending (which, we have been informed,
is now pending in the United States District Court for the District of Columbia as case no. 14-cv-
01047; we are advised that Robert Wick, Esq. of Covington & Burling is serving as lead counsel
for JPMC) or any other FCA cases that may be pending. The Loan Sale Settlement would also
result in all such loans being transferred to JPMC so as to address any and all future issues.

In order to aid your client in realizing the value of this arrangement, our clients are willing to
provide JPMC with a copy of relevant documentation in exchange for an agreement to meet
with a third party mediator. Our clients are amenable that the third party mediator be given a
directive to address all global issues. The resolution of all global issues, though, must take place
in the context of the Schneider Entities obtaining a satisfactory resolution of all of their claims
under the MLPA and otherwise relating to their direct dealings with JPMC. Issues related to the
NMSA False Claims Act matter currently pending or any other FCA cases that may be pending
can be addressed separately by the third party mediator.

Such an agreement regarding relevant documentation and third party mediation would be useful
to both sides. A mediator will, very quickly, be able to make clear to you certain inescapable
conclusions based on such documentation relating to the MLPA and the Schneider Entities' other
direct dealings with JPMC.

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JPMorgan Chase Bank, N .A.

June 27, 2014
Page 5

We would recommend one of several retired federal court judges who are active in this area. We
look forward to your prompt response.

cc: Christopher Catalano, Esq. (by email, w/encs)

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