Chase offers thousands of loan modifications
Chase has several loan modification programs in place to help struggling homeowners. Thousands of homeowners have been offered loan modifications from the federal governments Home Affordable Mortgage Program (HAMP), as well as through Chase's own modification and assistance programs. They also offer various options from Freddie Mac, Fannie Mae, VA and the FHA.
This year, JP Morgan Chase has provided almost 560,000 mortgage modifications, which is equivalent to over $100 billion in loans, to homeowners who need help with their mortgage and who may be facing a foreclosure. More than 83,000 that have already become permanent. They also continue their extensive efforts to help as many families as possible convert their loans into permanent modifications. They have already converted about 85,000 of these modifications into new, permanent lower interest rate mortgages.
They have a system and process in place to assist tens of thousands of people. They first attempt to help struggling borrowers by using the federal government supported Home Affordable Mortgage Program. If that option does not work for certain homeowners based upon their financial situation, then they work down their list to offer other options. They are able to offer a wide range of other loan modification programs and resources to help homeowners, including lowering interest rates, reducing principal, waiving fees, and other options. The bottom line is Chase wants to prevent foreclosures, and keep people in their homes.
Chase is strongly committed to making loans permanent as well. They have a detailed, extensive process in place to facilitate making a modification permanent. Some of those steps are noted below.
- Chases uses loan-modification counselors at the local level as they have opened offices across the country. They have in place a network of 30 Chase Homeownership Centers located in 13 states, in which they offer face to face counseling.
- They follow up with the homeowner and will attempt to contact them multiple times. They will call a customer up to 36 times, reach out to them by mail at least 15 times and they will also make at least two home visits, if necessary, to the customer.
- They employe counselors who specialize in outreach efforts, and these counselors specifically target borrowers with proximity to Chase Home Ownership Centers, allowing in-person support and extensive face to face contact.
- All documentation is retrieved as early as possible to speed up the process. They will order key documents earlier in the process including credit reports, property values, and tax transcripts and records. If there are documents missing, they work with two different firms to collect missing documentation, and they will also work with these agencies when the official loan modification agreements are in place.
- They ease the requirements on loan modification counselors by centralizing the review of borrower documentation for completeness and accuracy.
- Chase has enhanced document collection efforts as well as tracking capabilities to increase process efficiency of the mortgage modification process.
JP Morgan Chase is committed to the government HAMP program, however there have been some challenges. They try to convert customers from a trial modification to a permanent modification that will reduce their interest rate and thereby lower their monthly payment, however it has been a struggle to do this. The HAMP{ program has rules in place, for example borrowers need to make at least three trial payments on their new loan, they need to have their credit re-underwritten to get a permanent modification, and they also need to provide documents, including hardship verification and proof of income.
Not all homeowners are meeting these new rules. While about 50% of borrowers offered new loans from the Home Affordable Mortgage Program have made three payments, these same borrowers have not provided the documents that are necessary under the HAMP guidelines. About 30% of borrowers did not make the 3 payments. So the rules and guidelines are not always being adhered to my about 80% of homeowners.
However, even with these challenges, Chase continues to work with these homeowners to try to provide them with loan modifications or other options that may be able to help them save their home from a foreclosure.
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