Labor unions in New York City have taken steps to help alleviate the problems of foreclosures and REO properties in the city. Local reports reveal that two unions have told lender JPMorgan Chase that they would campaign to have their pension funds sell their Chase stocks and bonds unless the lender exerts more effort to help troubled homeowners.
According to reports, the plan was part of a New York Communities for Change initiative designed to encourage lenders to modify loan mortgages to lower the number of homes offered at New York foreclosure auctions. Officials from the union have reportedly revealed that Chase was chosen because it handles a huge number of home loans in the area. The lender has allegedly turned down a big number of loan modification applications.
The unions' officials also stated that they will collaborate with community leaders to convince investors to divest Chase assets if steps are not taken to help borrowers in danger of losing their properties to foreclosure auctions in New York. The two unions, United Federation of Teachers and Transport Workers Union, have a combined worth of over $300 million of pension funds invested in Chase.
According to local housing industry experts, it is unsure whether the effort will help the city in its problems with foreclosures and REO properties as the pension boards need to agree with the campaign first. In addition, a Treasury Department report issued last December showed that Chase has granted permanent modification to 34% of its mortgage holders; a figure that, on average, is the same as other banks.
Meanwhile, union officials have claimed that majority of borrowers who applied for a modification at Chase have been turned down and that most of them lost their properties to public foreclosure home auction listings. They estimated that only around 6% of the more than 1,000 homeowners who applied for a permanent modification during the period July 2008-December 2010 have been approved.
In response, a Chase spokesperson has stated that the bank has done everything it could to help troubled homeowners and contribute to solving the problem of the city with foreclosures and REO properties. The lender also stated that it has opened several centers in the state to provide counseling services.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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