JP Morgan Chase announced Friday it was expanding its “already significant” loan modification program to include recently acquired Washington Mutual and EMC customers.
Over the next 90 some-odd days, the bank and mortgage lender will put the brakes on foreclosures while it systematically reviews its entire mortgage portfolio to determine which borrowers can benefit from some kind of loan workout.
In order to streamline the process, borrowers in owner-occupied homes will be presented with pre-qualified offers such as mortgage-rate reductions and/or principal forbearance and those with pay option-arms will be offered more traditional offerings like 30-year fixed-rate mortgages.
In order to manage its growing servicing base, Chase will establish 24 new regional counseling centers and hire an additional 300 loan counselors, pushing its total to 2,500 nationwide.
The program is expected to offer help to roughly 400,000 borrowers with $70 billion in home loans over the next two years.
Since early last year, Chase, WaMu, and EMC have assisted about 250,000 borrowers with $40 billion in loans avoid foreclosure, namely thorough loan modifications.
“Chase inherited pay-option ARMs when it acquired WaMu’s mortgage portfolio last month and EMC’s portfolio earlier this year as part of the Bear Stearns acquisition,” the company said in a release.
“After reviewing the alternatives that were being offered to customers, Chase decided to add more modification choices. All the offers will eliminate negative amortization and are expected to be more affordable for borrowers in the long term.”