JPMorgan Chase More Than Half Way to $4B in Required Mortgage Relief, Monitor Says

JPMorgan Chase More Than Half Way to $4B in Required Mortgage Relief, Monitor SaysThe overseer of a settlement with JPMorgan Chase said Thursday that he has credited the nation’s largest bank with $2.2 billion out of the $4 billion it is required to provide consumers, mainly in the form of mortgage relief, by 2017.
The settlement stems from the packaging, marketing, sale and issuance of bad residential mortgage-backed securities by Chase, Bear Stearns and Washington Mutual to investors before the financial crisis.
Joseph Smith is the monitor overseeing the 2013 settlement between JPMorgan Chase and the federal government, along with five states.
Smith’s report also contained JPMorgan’s self-reported gross consumer relief, which the monitor has not yet validated. According to bank, it provided $5.1 billion in principal forgiveness and forbearance, rate reduction and low-to-moderate or disaster-area lending to 39,512 borrowers in the fourth quarter 2014.

The bank receives extra credit for certain types of consumer relief, and less for others. But the total is not a dollar-for-dollar accounting of the assistance provided to consumers.
For first and second lien principal forgiveness, JPMorgan Chase will receive one dollar of credit for each dollar forgiven on the eligible loans it holds for investment, Smith has said.
For each dollar of principal forgiven on loans that are serviced for others, the bank will receive 50 cents of credit. For second lien loans that are greater than 90 days past due, it will receive 40 percent of the credit it otherwise would have received.
The relief comes mainly in the form of mortgage forgiveness, refinancing and disaster-area lending.
Chase, JPMorgan’s brand for consumer loans, must also pay $9 billion in cash, totaling a $13 billion settlement.
The Chase RMBS (residential mortgage-backed securities) settlement also provides for the following conditions relating to consumer relief:
Relief will not be implemented through any policy that violates the Fair Housing Act or the Equal Credit Opportunity Act;
Relief will not be conditioned on a waiver or release of legal claims and defenses as a condition of approval for loss mitigation, except in cases of a contested claim where the borrower would not receive as favorable terms or consideration; and
Eligible modifications may be made under the Making Home Affordable Program, including HAMP, and the Housing Finance Agency Hardest Hit Fund, and any proprietary or other modification program.

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