Chase to Modify Investor-Owned Loans

January 16, 2009 No Comments »

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Chase today expanded its loan modification program to include another $1.1 trillion in investor-owned mortgages it services.

The company said it believes it can legally modify such loans, even those held in securitizations, based on its review of investor agreements and its experience with investors and trustees to date.

In other words, it’s become so bad that investors are willing to try anything to mitigate losses on their soured mortgages.

“When homes are foreclosed, everybody suffers, so working aggressively to modify all loans -whether owned by Chase or owned by others – on terms that should work for the borrower, makes good sense for everyone,” said Charles W. Scharf, Chief Executive Officer for Retail Financial Services at Chase, in a statement.

“Our experience at Chase has shown that when mortgages are properly modified, using income verification and other appropriate criteria, they perform very well over time.”

That said, the company also provided an update on their proprietary loan modification program already in place for Chase-owned loans.

While leaving out performance numbers, the company said it has delayed foreclosure starts on over $22 billion in Chase-owned mortgages for more than 80,000 homeowners.

Additionally, the bank and mortgage lender opened two of its proposed 24 “Homeownership Centers,” with the remainder expected to open by mid-March.

Chase also added 300 loan counselors to its team, pushing the total above 2,500 assigned to deal with the growing number of borrowers in arrears.

Earlier this week, Chase halted wholesale lending to focus on originating via its expanded retail network.

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