JPMorgan Tackles Troubled Mortgages

Andrew Jeffery  Nov 03, 2008 8:25 am

JPMorgan Tackles Troubled Mortgages
 
Bank to renegotiate thousands of loans.
 

 

The mortgage bailout parade marches on.

Just days after rival Bank of America (BAC) announced plans to modify hundreds of thousands of mortgages, JPMorgan (JPM) released details of a homeowner rescue plan of its own on Friday afternoon.

Following its takeover of both Bear Stearns and Washington Mutual, JPMorgan's inventory of distressed mortgages has risen dramatically in the last 8 months. The bank's modification efforts, which mirror Bank of America’s plan, are focused largely on subprime loans and option ARMs. The acquisition of WaMu saddled CEO Jamie Dimon’s firms with billions of these loans - $16 and $54 billion, respectively, according to the Wall Street Journal.



JPMorgan plans to identify borrowers with both the willingness and ability to pay, lower interest rates and, in some cases, forgive loan principal. For Option ARMs, borrowers may have the opportunity to replace their negatively amortizing mortgage with a safer, fixed rate 30-year loan.

Look out for more of these plans coming from the remaining big American banks, particularly Wells Fargo (WFC): Its recent acquisition of Wachovia (WB) included the Charlotte-based bank’s massive option ARM portfolio.

The plan is certainly a step in the right direction. It's nice to see that some of the recent $25 billion injection from the government will be funneled toward the taxpayers that ponied up the money in the first place.

Both JPMorgan and Bank of America's new programs, are, however, evidence of the government's -- and banks’ -- inclination to deal with problems that already exist, rather than ones that are on the horizon.

Click here to read more on the coming mortgage crises.

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Comments (7) See All Comments »
11-03-2008, 10:46 am
i would like to know where i can go to get help with my mortgage, the government has given billions, can i go somewhere to apply for help? joycemwest@pmt.org
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11-03-2008, 4:56 pm

LOL - You and me both Joyce!

I called up WaMu today and asked them how I could go into default and take advantage of the new program.

They said "Um...you have a prime mortgage, not a sub-prime."

Read More
11-03-2008, 10:51 pm
I called Wells Fargo today because they forgot to autodebit my checking account. When I got to the first prompt they had a nice little promo about special mortgage assistance that could be provided. So, I decided to look into it. The gal on the ph
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11-03-2008, 11:34 pm
My feelings exactly.

Code words to use: "special mortgage assistance".

Thanks William!

WaMu had a "Press 5 if you received a letter regarding mortgage remediation" or some euphamism like
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11-04-2008, 11:32 am
Eric,

I also forgot that she said that with the program, during the 90 days you are not paying, they do NOT report that to the credit bureaus. So, it truly seems like a no lose proposition.
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Andrew Jeffery is an Editor at Minyanville Publishing & Multimedia, LLC.

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