Chasing Investor-owned Mortgages
As crowds enthusiastically cheered on the new Obama Administration on Capitol Hill, investors jeered the financial mess on Wall Street, plunging bank stocks to historic lows and unnerving investors as talk spread that the government could nationalize banks and wipe out shareholders in the process.
The sell-off, triggered by anxiety in the financial sector and its effect on the overall economy, underscored the widespread fears and uncertainty that permeates the financial markets.
Consider just one of Wall Street’s financial titans: JPMorgan Chase & Co. Last week, Chase (which bought Washington Mutual last year) expanded a mortgage modification program to include investor-owned mortgages serviced by Chase. Running a series of full-page advertisements in major daily newspapers dubbed “The Way Forward,” Chase is urging investor-owned borrowers to modify their defaulting Chase loans. The move expands the program from homeowner mortgages to investor-owned mortgages.
Since October, Chase’s foreclosure prevention program has delayed foreclosure filings on $22 billion Chase-owned mortgages and has assisted 80,000 homeowners with mortgage modification, according to a Chase news release. The company claims it has prevented 330,000 foreclosures since 2007.
The problem, however, with relief programs like Chase’s is that “underwater” borrowers rarely surface for help. And when they do reach out, lenders are frequently unprepared to help upside down borrowers.
What are your thoughts on mortgage modification programs like Chase’s? Do you think they work? Or, are loan modification programs a grand game of financial roulette?