Chase Bank Eases Loan Modification Guidelines

Chase Bank Loan Modifications

With the flip of a wrist and your signature, JPMorgan Chase Bank is reducing home loan interest rates and cutting mortgage debt balances in the process. The new loan modifications guidelines are relaxed, and given that sometimes a signature isn’t required, that perhaps is an understatement. Chase Bank is rolling out the plan for Chase-owned loans, and borrowers no longer need to worry about faxing over endless documentation and waiting for months on end without a response. Close to 8% of Chase’s home loans are in Florida.

There are two main targets for the new Chase Bank loan modification program. First, home owners who are delinquent on their mortgage and behind on payments, and these candidates may receive a letter offering them a lower interest rate, principal reduction, or both. All that is required is that they sign the offer and return it to the bank. The second group of people who might qualify are home owners who owe more on their mortgage than their home is worth, but have been current on their payments for at least a year. Chase is offering to reduce the interest rate on its own without being contacted by the borrower. They will instead receive a letter with their new lower payment amount.

According to Chase, the average savings is $300 per month for homeowners current on payments. In a statement, they said, “Chase is taking a proactive approach to helping homeowners. We are sending modification offers, many of which include principal forgiveness, to thousands of families that are struggling with their mortgage payments.”

In February, the attorney general’s office announced a settlement on behalf of 49 states, and Chase Bank is part that settlement that required them to provide approximately  $4.2 billion in mortgage relief to homeowners. A national deal that includes Chase, Wells Fargo, Citigroup, Bank of America, and Ally Financial could offer up to $40 billion in cash, refinances, and principal write-downs to troubled home owners.

Lenders are starting to realize that it’s a better deal to have a functioning loan on the books versus a default or foreclosure on the record, which is one reason they are being proactive. It’s time that banks step up and become more realistic about the economy, the job market, and how both of those things relate to real estate transactions. For most borrowers, it’s not that they simply don’t feel like paying their mortgage anymore; on the contrary, many are out of a job and can’t afford to make their payments. Now that banks are realizing it’s a better deal for them to have a performing loan versus multiple properties in foreclosure, home owners may start to see some relief.

We are a team of Boca Raton real estate experts who specialize in short sales of homes and condos. If you are interested in learning more about the short sale process, or would like to learn more about Palm Beach luxury foreclosures, please contact our team of short sale experts. We would love to sit down and discuss your unique real estate objectives.


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