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JPMorgan expands loan modification program

November 01, 2008|The Associated Press

New York — JPMorgan Chase & Co. on Friday became the latest major bank to beef up its mortgage modification efforts as the government also considers a plan to help homeowners avoid foreclosure.

JPMorgan's expanded program aims to help avoid foreclosures on an estimated $70 billion in loans, which could aid as many as 400,000 customers. The New York-based banking giant has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.

JPMorgan will not put any loans into foreclosure while it implements the expanded program over the next 90 days.

The $70-billion estimate is projected over a two-year period, but it could end up larger than that and last more than two years -- as long as the company sees a need among troubled borrowers, said Charlie Scharf, JPMorgan's chief executive of retail financial services.

"We think it's the right thing to help as many people who want to stay in their homes," Scharf said.

He added that the modifications at JPMorgan will include such things as reducing rates, extending terms and even completely replacing loans. The options will be given to customers based on their current product and needs.

The program will also be offered to customers with loans held by Washington Mutual Inc. and EMC. JPMorgan acquired Washington Mutual after the bank became the largest in the nation's history to fail. EMC was a mortgage unit of Bear Stearns Cos., which JPMorgan acquired in February.

JPMorgan shares jumped $3.63, or 9.7%, to $41.25 on Friday.

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