JPMorgan to modify home mortgages to limit foreclosures

October 31, 2008 by · Leave a Comment
Filed under: Real Estate News 

Now this is the type of assistance that I think is beneficial.   It is a private sector solution that is a compromise between both affect parties.  This does not need public funds to be accomplished and if the borrower has the income to support a home loan with normal terms then they should be able to keep their house.  If they got in over their head then they should be foreclosed upon.  

This serves two among many important functions.  One, it lowers the prices in the area to make them reflect the true value in the home and in turn makes them affordable.  Second, it punishes people who made speculative purchases to set an example for the future when the next bubble comes along.   Many people will disagree with these points, but I feel the short-term pain is better than long-term problems.

News:

JPMorgan Chase & Co., the largest U.S. bank by market value, plans to modify terms on $110 billion of mortgages and forgo foreclosure proceedings on all real-estate loans while the changes are implemented in the next 90 days.

The offer extends to customers of Washington Mutual Inc., the savings and loan JPMorgan agreed to buy last month, the New York-based bank said today in a statement. Loan modifications may include interest-rate or principal reductions. The bank said it will establish 24 regional counseling centers to provide face-to- face help in areas with high delinquency rates.

“We felt it is our responsibility to provide additional help to homeowners during these challenging times,” said Charlie Scharf, chief executive officer of retail financial services at JPMorgan Chase. “We will work with families who want to save their homes but are struggling to make their payments.” 

Source: Bloomberg

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