Chase Offers 568,000 modifications on more than $100 billion of mortgages in 2009
More than 83,000 already permanent
Continue extensive efforts to convert offers to permanent lower payments
NEW YORK, December 8, 2009 - Chase announced today that it has offered more than 568,000 mortgage modifications, for more than $100 billion in loans, to struggling homeowners in 2009, including more than 83,000 that have already become permanent.
These homeowners have been offered modifications through the U.S. Treasury's Home Affordable Mortgage Program, as well as through Chase's own modification programs and those of Fannie Mae, Freddie Mac, VA and FHA. The results are provided in the table below:
"We first attempt to help struggling borrowers using the Home Affordable Mortgage Program. If they are not eligible for it, we use a range of other modification programs," said Charlie Scharf, head of Retail Financial Services at Chase, part of JPMorgan Chase & Co.
"We continue to work very hard to convert customers from a trial modification to a permanent modification that lowers their monthly payment, but it has been a struggle," he said. Under the HAMP rules, borrowers must make at least three trial payments, provide documents, including proof of income and hardship verification, and have their credit re-underwritten to get a permanent modification.
About 51% of borrowers offered HAMP trials from April through September - about 75,000 families - have already made three payments, but have not provided documents acceptable or necessary under the HAMP guidelines.
In addition, 29% of borrowers offered HAMP trial plans did not make all required payments, making them ineligible for a permanent modification under the program. About 20% of borrowers have made all payments and provided all the necessary paperwork, and the majority of them are expected to get permanent modifications soon.
"We want to give customers every opportunity to make their modifications permanent," Scharf said. "We have hired thousands of employees and expanded our outreach, and we have begun to see some improvement in results. We believe our intensified efforts, plus the heightened awareness of these issues, will help further encourage struggling customers to make every effort to complete their modification."
Chase continues its extensive efforts to help these homeowners successfully convert into permanent modifications, including:
- Launching a coordinated program to call a customer 36 times, reach out by mail 15 times and make at least two home visits, if necessary, to get the appropriate documents
- Using local loan-modification counselors in its network of 30 Chase Homeownership Centers in 13 states for more effective face-to-face contact
- Ordering key documents earlier in the process including property values, tax transcripts, and credit reports
- Completing the roll-out and training of loan modification counselors on the recently issued Treasury Department Supplemental Directive 09-07 that streamlines documentation and underwriting requirements
- Centralizing the review of borrower documentation for accuracy and completeness, easing requirements on loan modification counselors
- Engaging two firms to collect missing documentation and official modification agreements from borrowers through in person visits to their homes
- Deploying outreach efforts specifically targeting borrowers with proximity to Chase Home Ownership Centers, allowing in-person support
- Transitioning to an ownership model for loan counselors, assigning pools of accounts to each for end-to-end processing
- Employing additional programs and motivational campaigns to increase productivity across loan counselors
- Enhancing document collection and tracking capabilities to increase process efficiency
Chase services about 10.3 million loans, including about 8 million loans for investors.
About Chase
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), which operates more than 5,100 branches and 15,000 ATMs nationally under the Chase brand. Chase has 146 million credit cards issued and serves consumers and small businesses through bank branches, ATMs and mortgage offices as well as through relationships with auto dealerships and schools and universities. More information about Chase is available at www.chase.com.