JPMorgan Chase to widen mortgage-modification program

The move expands the foreclosure-prevention program from mortgages the company owns to those it services.

January 17, 2009|Associated Press

NEW YORK — JPMorgan Chase & Co. on Friday said it had expanded a mortgage-modification program to cover investor-owned mortgages serviced by Chase, the company's U.S. consumer and commercial banking business.

Chase said its expansion of a foreclosure-prevention program announced Oct. 31 could cover an additional $1.1 trillion in investor-owned loans, including mortgages held in securitizations, or bundles of mortgages sold to investors.

The move expands the program from mortgages that New York-based Chase owns to those that it services by collecting payments and distributing them to investors.

Chase said in a statement that it "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."

Charles Scharf, chief executive of retail financial services at Chase, said the company "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."

Since the October announcement involving Chase-owned loans, Chase has delayed starting foreclosure on more than $22 billion of mortgages involving more than 80,000 homeowners so it could review them for possible modifications to aid borrowers, the company said.

Through that program and other efforts, Chase said, it has prevented about 330,000 foreclosures since early 2007, primarily by modifying loan terms.

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