JPMorgan to Modify Mortgages to Limit Foreclosures (Update1)
By Elizabeth Hester
Oct. 31 (Bloomberg) --
JPMorgan Chase & Co., the largest U.S. bank by market value, plans to modify terms on $110 billion of mortgages and forgo foreclosure proceedings on all real-estate loans while the changes are implemented in the next 90 days.
The offer extends to customers of Washington Mutual Inc., the savings and loan JPMorgan agreed to buy last month, the New York-based bank said today in a statement. Loan modifications may include interest-rate or principal reductions. The bank said it will establish 24 regional counseling centers to provide face-to- face help in areas with high delinquency rates.
``We felt it is our responsibility to provide additional help to homeowners during these challenging times,'' said
Charlie Scharf, chief executive officer of retail financial services at JPMorgan Chase. ``We will work with families who want to save their homes but are struggling to make their payments.''
Congress has been urging financial-services companies to work with borrowers and avoid foreclosures, which rose to the highest on record in the third quarter. States pivotal to the Nov. 4 U.S. presidential election, including Florida, Ohio and Nevada, had some of the highest foreclosure rates in the nation, according to data compiled by RealtyTrac.
Federal Deposit Insurance Corp. Chairman
Sheila Bair has proposed a plan to guarantee mortgages to help stem foreclosures, according to two congressional aides briefed on the matter. Her idea is to use as much as $50 billion of the $700 billion financial-services industry bailout package approved by Congress this month.
400,000 Families
The JPMorgan program is expected to help 400,000 families with $70 billion in loans in the next two years, JPMorgan said. The company said an additional 250,000 families with $40 billion in mortgages have already been helped under existing loan- modification programs.
The programs are aimed only at homeowners who ``show a willingness to pay,'' the bank said. ``Customers should continue to make mortgage payments to reflect their intent to honor their commitments.''
JPMorgan said it will also donate or offer a ``substantial discount'' on 500 homes to community groups in order to stabilize local markets.
To contact the reporter on this story:
Elizabeth Hester in New York at
ehester@bloomberg.net.
Last Updated: October 31, 2008 12:59 EDT
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I also have had a good week.
