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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?

Posted: Thu, January 22 2009 10:14 AM by Octavion
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Comments

BRIAN FISHER said:

I have a Chase second mortgage and a Citi first mortgage. I bought a $465,000 home in early 2004, with 1,548 square feet of living space in the 91354 zip code.

I was ill in 2006, and out of work, due to the wonderful lending practices I was able to obtain 2nd mortgage so I could pay my bills during my illness six months off work.

The value of my home was $620,000 in 2006, (BUBBLE value). My wife was later laid of mortgage from the mortgage industry, and is making 1/3 of what she used to make.

My bonus was taken away — that was a 1/8 of my annual salary. So my credit card debt is high, and I’m no longer able to make my minimum payment and my mortgages.

So I called Chase to discuss the situation. I went to a recording after I was transferred around for an hour. No phone call, no letter responding to message. I sent a certified mail letter with return receipt with a LOE, income documentation, copy of all bills, assets, etc., begging for some assistance, relief etc.

NO RESPONSE.

I paid half of my second mortgage payment. Chase called asking what was wrong. I started to explain the situation, requesting accommodation of any sort.

I WAS INFORMED THAT THEY CAN’T DO ANYTHING UNLESS THE FIRST MORTGAGE AGREES TO DO SOMETHING!

I am $150,000 + upside down. Chase provided a ridiculous value back to 2006. No comparables exist in 2006 with a $620,000 value within a 5-miles radius. It sounds PREDATORY to me. If they don’t want to help, then they can try to foreclose and assume the first mortgage.

I THINK THEY WOULDN’T DO. FOR ALL I CARE, THEY CAN TAKE THIS $4,000-A-MONTH, 1,500 SQUARE FOOT OVERPRICED STRUCTURE, AND RESELL IT FOR REPLACEMENT COST WHICH IS WHAT IT’S WORTH NOW.

HOME OWNER, BUBBLE VICTIM, GETTING PUSHED INTO WALKING AWAY

# January 23, 2009 9:03 PM

Octavion said:

Brian,

Now I can see why some homeowners are ready to walk away from their mortgages.

I'm sure you're not the only borrower getting "pushed" into walking.

Good luck to you.

Octavio

# January 27, 2009 11:03 AM