Posted on 10/31/2008 4:09:06 PM PDT by BGHater
The big bank ramps up a program to modify terms for 400,000 homeowners and kills a highly criticized type of mortgage
In what may the biggest sign yet that banks are getting serious about attacking the nationwide wave of home foreclosures, giant JPMorgan Chase (JPM) announced on Oct. 31 that it is sharply ramping up its efforts to restructure the loans in its massive mortgage portfolio. For the next 90 days, JPMorgan will not place any new homes into foreclosure.
The banking behemoth, which acquired troubled lender Washington Mutual on Sept. 25, says it hopes to modify terms for 400,000 homeowners, accounting for $70 billion in loans. Among the steps it is taking: eliminating toxic "pay option" loans, offering new loan terms to homeowners before they default, and hiring an additional 300 loan counselors to bring the company's total to 2,500. "While Chase has helped many families already, we feel it is our responsibility to provide additional help to homeowners during these challenging times," said Charlie Scharf, head of Chase's retail financial services, in a prepared statement.
The JPMorgan Chase announcement comes as the U.S. bailout strategy seems to be shifting from the initial approach of having the Treasury Dept. buy $700 billion worth of troubled mortgage assets from lenders, to investing directly in big banks to spur more loans (BusinessWeek, 10/29/08), and now toward a coordinated effort to restructure loan terms for individual borrowers. Federal Deposit Insurance Corp. Chairman Shelia Bair has been pushing to have the federal government take a more active roll in loan restructurings (BusinessWeek.com, 10/30/08). The effort could be modeled after the fast-track mortgage modification program the FDIC put in place after taking over failed IndyMac bank in July.
(Excerpt) Read more at businessweek.com ...
Finally, someone is thinking about this thing in a rational way.
that stinks, those people belong out on the street!!
I was thinking they were let the Gov’t take care of it. ie buy the homes.
I am always in favor of solutions that involve the free market. Nonetheless, with the Gov’t having its hooks in JP Morgan Chase, I can’t help but think that Chase is hedging its bets against an Obama victory.
Chase is also looking down the road to being a favored acquirer of more troubled banks. There’s also a pretty good chance the Feds will come in and fix the loans.
The market will not be fooled. Mortgages will disappear ( well, they aren’t coming back)
Textbook example.
Yep!
They are waiting to sell them at 100% value to the morons at the Treasury Department.
A lot of these sub-prime mortgages were interest only, with the borrowers failing to afford even that portion of a regular payment.
The reality might be that despite bending over backwards there will be no way to rescue every borrower out there.
We’re into a new area here. The gubmint can play its most valuable role by reviewing the appropriate laws and changing them as needed.
The reality might be that despite bending over backwards there will be no way to rescue every borrower out there
The idea isn’t to save all of them, just save the ones who can be saved. Perform financial triage going in and act accordingly.
You can’t be series.
Maybe if you had the actual numbers then you could see that some loans are able to be restructured. People’s situations are going to fit a bell curve rather than a binary good or evil.
Woo hooo! Free living!
Only a sucker pays their mortgage!
Hmm, an average loan of $175,000, so around $1200 a month payments.
“You can’t be series.”
Never been more serious in my life!
I have almost $200k in that bank and i’m going to formally complain about their not forclosing on delinquent real estate squatters!
Do you really think it’s better to hold distressed real estate in this market, paying for upkeep and insurance with zero income, before selling for a big loss, or do really just hate people?
Anyone that signs a contract should live up to the terms of it or suffer the consequences.
If the terms of their mortgage are modified it’s damageing me.
I hate people that try to get away from fully living up to their promises, especially signed agreements.
I don’t believe in bankruptcy either!!
You aren’t a Christian are you?
I quit going to church for drag racing on Sunday wnen I was 8 years old!
I’m such an idiot for being honest and not getting in on this scam. I should have bought a $1 million home and gone delinquent so I could get my loan dropped down from $8,000/mo to something I can afford, like $2,500/mo. What an idiot I am. The government, and the government’s agents at the bailed out banks are subsidizing expensive homes for people who can’t afford it while I just get the shaft again.
When do I get to start shooting people?
Well maybe you should spend a bit of time finding out what God has to say about usury.
“Well maybe you should spend a bit of time finding out what God has to say about usury.”
I could care less, if someone signs contract for 100%/mo. they should pay it.
If they can’t afford it, DON’T SIGN THE CONTRACT!
Just like when Carter was Pres, I took an unsecured 50K @ 11%loan from the bank but only because I already had it loaned out @ 18%.
My experience in this scam was when my son, with college diploma now in hand, not a dime to his name but NO debt was told because of his now secured job could qualify for a $150,000.00 mortgage. Note I did not say a house that literally had the value of $150,000.00 but a mortgage. And he was given ways he could present 'papers' faking himself a credit history. Oh and no he was not scammmed but it sure was enticing until he saw what $150,000 would buy.
Up to this time it had been my experience that one was required to put 20% down in order to even get to whether or not one could afford the monthly interest and then that tiny bit of principle. How many people ever actually sell their homes for the total amount they pay for them?
You think public education explains loans/mortgages and what exactly you are agreeing to upon signature?
“You think public education explains loans/mortgages and what exactly you are agreeing to upon signature?”
No, but the do teach math and how to read.
It’s the parents job to teach the rest.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.