If you get something in the mail from Chase…open it up!

JPMorgan Chase went from fast-tracking foreclosures to rubber stamping and pre-approving some borrowers for refinances and even principal reduction.

The five largest mortgage servicers signed a $25 billion deal with federal prosecutors and 49 state attorneys general in March to settle foreclosure abuses and documentation problems in the past. Chase agreed to provide roughly $4.2 billion in relief to homeowners under the agreement, including principal write-downs, modifications and refinances for underwater borrowers.

According to terms of the agreement, servicers receive more credit for granting the relief within the 1st year of the settlement.

But since the foreclosure crisis first struck five years ago, borrowers have grown weary of the documentation black holes at the major banks. Many have spent hours in front of FAX machines, only to be asked for resubmissions or another piece of paperwork.

In a few cases Chase executives are addressing the borrower fatigue with a letter sent to borrowers notifying them that their loan was refinanced into a new mortgage with a lower interest rate. No documentation was needed. Chase owned the loan.

Borrowers receiving these letters saved an average of $300 per month on their payments, according to a statement from the bank sent to HousingWire.

Chase is sending different letters to other underwater borrowers. All that is required in order for a principal reduction on their loan is a signature sent back with the included self-addressed stamped envelope the bank provides.

Not everyone is convinced on the method. The Federal Housing Finance Agency last week refused to allow such write-downs on Fannie Mae and Freddie Mac loans.

Roy Oppenheim, a foreclosure defense attorney operating in Florida, said in an interview that the Chase letters do not surprise him. The foreclosure process in Florida is so costly, backlogged and uncertain that many banks are looking for "a less tortuous method."

This includes even reducing principal and refinancing a risky underwater borrower when they can.

"There are even bigger problems that lie ahead if they go with the foreclosure," Oppenheim said.

So..don’t automatically throw those letters from Chase away!

If you’re upside down and having trouble keeping up with your home expenses…this may be just what you need! If you don’t receive one of these letter in the near future and Chase is your lender…give them a call.

 

Or call me at 561.602.1258

Thanks for reading…Steve Jackson