Real Estate Pro Articles

Modified Mortgage Program Prevented 250,000 Foreclosed Homes

[Valid RSS feed]  Category Rss Feed -
By : Cassiano Travareli    99 or more times read
New York based JPMorgan Chase & Co, made announcements that it prevented at least 250,000 foreclosures since it joined other banks last 2007 in modifying or refinancing mortgages from clients who are delinquent in payments and those who may not be able to pay higher interest rates. This is a bid to thwart an increase in foreclosed homes and prime mortgage losses that bank executives from JPMorgan predict could reach $300 million by the start of 2009.

Despite this forecast in foreclosures and the continuing rise in unemployment, the bank is making headway in helping 400,000 more customers pay their loan amortizations through its efforts in modifying loans. This restructuring program includes extensions on loans, reduction in principals, and principal tolerance or forbearance, which should not be mistaken for forgiveness.

In spite of all these efforts, foreclosure homes would still result from some of these loans. There is still a limitation as to what modification on the mortgage could be done which could benefit both bank and client. Imminent foreclosures are more probable for mortgages which are delinquent for 2 to 3 months.

Another impediment in the success of these programs is the difficulty some bankers face in trying to communicate their efforts to customers. Clients, who are delinquent in their mortgage payments, have the natural tendency to ignore bankers. Most fear these calls are demands for forced payments. JPMorgan Chase alone made 125 million calls but only six million actually got through.

Included in this program of trying to reach customers are JPMorgan Chase’s efforts in remodeling their branches to have more customer appeal, particularly branches of newly acquired Washington Mutual Inc. or WaMu. JPMorgan Chase bailed out WaMu, when this Seattle thrift bank collapsed due to this recent dilemma in mortgages and foreclosures.

Weak deposits and tremendous outflows led to this bank’s quick demise. JPMorgan finally put a halt to this negative flow and has started to focus on making WaMu profitable once more. Part of this is to grow the bank’s customer base through an increase in checking accounts and offerings of credit cards and other innovative products.
Cassiano Travareli has been educated in the finer points of the foreclosures market over 5 years.

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles