JPMorgan Chase (JPM) Announces Initiatives to Strengthen Mortgage Modification Program
JPMorgan Chase (NYSE: JPM) today announced it is expanding its already significant mortgage modification program by undertaking multiple initiatives designed to keep more families in their homes, including extending its modification programs to WaMu and EMC customers.
Chase will open regional counseling centers, hire additional loan counselors, introduce new financing alternatives, proactively reach out to borrowers to offer pre-qualified modifications, and commence a new process to independently review each loan before moving it into the foreclosure process. Chase expects to implement these changes within the next 90 days.
While implementing these enhancements, Chase will not put any additional loans into the foreclosure process. This will give affected homeowners an opportunity to take advantage of the enhancements, and applies only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
Chase will continue to work diligently with investors to get their approval to apply these programs to the loans it services for others, so its efforts have the broadest possible impact. These programs are designed for homeowners who show a willingness to pay, so Chase, WaMu and EMC customers should continue to make mortgage payments to reflect their intent to honor their commitments.
The enhanced program is expected to help 400,000 families - with $70 billion in loans - in the next two years.
As a result of these enhancements for Chase, WaMu and EMC customers, Chase will:
- Systematically review its entire mortgage portfolio to determine proactively which homeowners are most likely to require help - and try to provide it before they are unable to make payments.
- Proactively reach out to homeowners to offer pre-qualified modifications such as interest-rate reductions and/or principal forbearance. The pre-qualified offers will streamline the modification process and help homeowners understand that Chase is offering a specific option to make their monthly payment more affordable.
- Establish 24 new regional counseling centers to provide face-to-face help in areas with high delinquency rates, building on the success of one- and two-day Hope Now reach-out days.
- Add 300 more loan counselors - bringing the total to more than 2,500 - so that delinquent homeowners can work with the same counselor throughout the process, improving follow-through and success rates. Chase will add more counselors as needed.
- Create a separate and independent review process within Chase to examine each mortgage before it is sent into the foreclosure process -- in order to validate that each homeowner was offered appropriate modifications. Chase will staff the new function with about 150 people.
- Not add any more Chase-owned loans into its foreclosure process while enhancements are being implemented.
- Disclose and explain in plain and simple terms the refinancing or modification alternatives for each kind of loan. Chase also will use in-language communications, including local publications, to more effectively reach homeowners.
- Expand the range of financing alternatives offered to modify pay-option ARMs, including 30-year, fixed-rate loans with affordable payments, principal deferral and interest-only payments for 10 years. All the alternatives eliminate negative amortization.
- Offer a substantial discount on or donate 500 homes to community groups or through non-profit or government programs designed to stabilize communities.
- Use more flexible eligibility criteria on origination dates, loan-to-value ratios, rate floors and step-up features.
JPMorgan Chase & Co., a financial holding company, provides a range of financial services worldwide.
Create E-mail AlertRelated Categories
Corporate NewsStocks Mentioned
+0.00Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
