Chase extends modification efforts to include the $1.1 trillion of investor-owned mortgages it services MortgagePress.comChase, loan modifications, securitizations, investor-owned mortgages, Charles W. Scharf
Chase has announced that it has extended its mortgage
modification efforts to the investor-owned loans that it
services--about $1.1 trillion of loans--significantly expanding the
reach and effectiveness of its previously announced mortgage
modification efforts. This effort includes investor-owned mortgages
held in securitizations.
Based on the company's review of investor agreements and its
experience with investors and trustees to date, Chase believes it
can legally modify the vast majority of mortgages owned by
investors consistent with the relevant investor agreements and the
best interests of investors, and intends to make modifications
where appropriate. Chase will continue to seek investor approval in
the small number of situations where investor agreements contain
specific terms that may limit modification actions Chase can
take.
"Building on our modification efforts for Chase-owned loans, we
have reviewed closely the terms of our investor agreements and have
worked with investors, trustees, government officials and other
interested parties to fashion an approach to foreclosure prevention
efforts that will work for investors and homeowners," said Charles
W. Scharf, chief executive officer for retail financial services at
Chase.
"When homes are foreclosed, everybody suffers, so working
aggressively to modify all loans--whether owned by Chase or owned
by others--on terms that should work for the borrower, makes good
sense for everyone," Scharf said. "Our experience at Chase has
shown that when mortgages are properly modified, using income
verification and other appropriate criteria, they perform very well
over time."
Update on foreclosure prevention program
Chase announced enhanced foreclosure prevention efforts on Oct.
31, and the company now has in place the people, programs and tools
to help more borrowers stay in their homes. And since early 2007,
Chase has prevented about 330,000 foreclosures, primarily by
modifying loan terms. Since its October announcement covering
Chase-owned loans, Chase has:
• Delayed starting foreclosure on over $22 billion of
Chase-owned mortgages of more than 80,000 homeowners so that Chase
could review those mortgages for possible modification under the
enhanced program.
• Implemented the previously-announced, more attractive
package of modification offers for delinquent borrowers.
• Finalized for mailing in early February proactive
modification offers to borrowers of Chase-owned loans at imminent
risk of default.
• Selected sites for 24 Chase Homeownership Centers in
areas with high mortgage delinquencies where counselors can work
face-to-face with struggling homeowners. Two of the centers are now
open; 12 are expected to be open by Feb. 28; and the remaining 10
are scheduled to open by mid-March.
• Added 300 new loan counselors in the last 11 weeks to
provide better help to troubled borrowers, bringing the total
number of counselors to more than 2,500.
• Initiated an independent review process to ensure each
borrower was contacted properly and offered modification prior to
foreclosure, if appropriate.
• Developed a robust financial modeling tool to analyze
and compare the net present value of a home in foreclosure to the
net present value of a proposed loan modification; use of this tool
will allow Chase to determine that it is acting in the best
interests of investors when making loan modifications.
• Worked to help establish a non-profit clearinghouse to
join Chase and other lenders who want to donate or discount their
owned real estate with the non-profit and government agencies that
can use these properties. Chase is continuing to work with
individual non-profit and government agencies; to date, Chase has
completed five donations and has 47 discounted sales pending.
• Worked with Fannie Mae and Freddie Mac to implement
their new Streamlined Modification Program for borrowers at least
90 days delinquent; 19,000 letters were mailed in the last week of
2008.
Chase has been working with Fannie Mae to implement Fannie Mae's
previously announced program to assist borrowers facing imminent
risk of default. Through the initiative, Chase believes it will be
able to meaningfully increase the number of homeowners it can
help.
This announcement reflects Chase's continuing commitment to
proactively keep as many borrowers out of foreclosure as possible
and to explore other steps that can help further this crucial
goal.
For more information, visit www.chase.com.
