JPMorgan Chase Loan Modification - Mortgage Program Expanded

As reported by CNNMoney.com - "JPMorgan will modify mortgages":

JPMorgan Chase & Co. said Friday it is expanding its program to modify mortgages in an effort to avoid foreclosures on up to $70 billion in loans.

The enhanced program will include the opening of 24 regional counseling centers, the hiring of 300 additional loan counselors, new financing alternatives, reaching out to borrowers with pre-qualified modification terms and a new process to independently review each loan before it is moved into foreclosure.

Chase said the changes are expected to be implemented in the next 90 days, and until those changes can be made, it will not put any loans into foreclosure.

Other loans ARE included in the loan modification program:

The loan-modification program will also be offered to customers with loans held by Washington Mutual Inc. and EMC. JPMorgan (JPM, Fortune 500) acquired Washington Mutual last month 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.

Who's eligible? Who's not?:

The modification program applies only to owner-occupied properties with mortgages owned by JPMorgan, Washington Mutual or EMC, with investor approval.

It's quite clear that the big push in regards to the banking institutions are the implementation of their loan modification programs. Other banks of note implementing loan modification programs are B of A and IndyMac Bank.

Without a doubt, in the short-term, these loan modification programs will help homeowners to the extent that their monthly mortgage payments will become cheaper, lightening the financial load weighing heavily on most Americans in consideration of today's grim economic conditions.

One of the main arguments against these types of programs is the belief that the inevitable is merely being pushed to a future date. In paraphrasing, "if you can't afford your home now, you most likely won't be able to afford it in a few months or a year (give or take) down the road."

We disagree with this argument (to an extent) in consideration that drastic measures have been taken (to this point, mostly in outlining the laws that will implement these programs) to pump huge amounts of liquidity into the market, the Feds have dropped the Federal Funds Rate to historically low levels, and housing prices have fallen significantly (so significantly that some of these overheated markets are returning to levels seen before the boom).

Again, these government funded measures, coupled with the banks' loan modification programs, WILL equate into more money for the pockets of homeowners who are the recipients of these programs. This money is immediate and couldn't be at a better time for most.

As with many large institutions, we don't believe the banks will be able to move quickly so the effects of these loan modification programs will be slow and gradual resulting in less foreclosures being dumped into the market over a protracted period of time. Not all of these adjustments are merely 1, 2, or 3-year extensions of cheaper rates. Some of these programs include cheaper rates, principle reductions, and a transition into 10-year to 30-year fixed type products. Hence, a wave of future delinquencies are less likely than that of the sub-prime tsunami. Less available housing units now, regardless of which type, means less inventory. The sooner these inventory levels stabilize, the quicker housing prices will begin to stabilize. Systemic positive effects will begin to infiltrate the market just as the negative effects are currently plaguing our economic markets.

Cheap government funded money and lots of it, a battered housing market, a volatile stock market, equates into more investors turning to real estate for their investment vehicle of choice. In the field, many Realtors will tell you that they've already seen a substantial increase in the number of CASH buyers looking to enter many of these overheated markets that have fallen hard and fallen fast. If investors are entering the market now, with CASH, odds are they've done this before thus unscientifically indicating that there's some level of comfort with current housing prices.

In short, we believe many critics of these programs are critics in terms of their ideological views that a thorough cleansing of the housing market needs to happen. They would suggest no more stints and tourniquets as this is what got us to this point. Do you agree?

We suggest that whether you do or not, these programs will have a positive affect in the near term. When it comes to money, future relevancy seems to be of little importance when tomorrows bills are what you fear. Furthermore, how many people are concerned with the future implications of their actions when they're mired in their day to day tasks? Good, bad, or indifferent, nearly everything is put off into the future except for the endless yearning of immediate gratification. Is anyone noticing a trend with this sort of human nature? Does this ever seem to go away? Will we learn our lesson from this current housing and economic mess?

As usual, most definitely will not!


Loan modification mania. Find additional links to our loan modification articles below:

1. Fannie Mae and Freddie Mac - New Loan Modification Program
2. Loan Modification Specialist - Don`t Miss Your Calling!
3. Loan Modification Programs - Officially in Vogue?
4. Loan Modification Programs - IndyMac and B of A Lead the Way
5. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Bank of America To Kick Off A Loan Modification Party

Bank of America announced that it will begin modifying loans for distressed borrowers. The plan is touted as being a strong measure that will go a long way towards helping to curb the amount of future homes heading into foreclosure.

"The program, scheduled to start in December, will be open to distressed borrowers who signed up with Countrywide Financial between January 1, 2004 and December 31, 2007. Countrywide was acquired by Bank of America (BAC, Fortune 500) in July." - (CNNMoney.com)

If the plan is successful, there's no doubt that the adjustments will have an impact on preventing a certain percentage of foreclosures. As foreclosures begin to subside, inventory levels will begin to normalize. Housing stability should follow in line.

It's hard to deny that drastic measures need to be taken in consideration of the continuing U.S. housing decline and "depression" like economic conditions. Nonetheless, there seems to be quite a few Americans crying foul as they are keeping up with their mortgage payments and are not eligible for any such relief. Some ask, why are we being punished for paying our mortgage and not overextending beyond our financial means?

Is this a valid complaint? Will we see other banks follow suite? Perhaps it's all just a matter of perspective. Nothing seems overly fair right now.