JPMorgan expands foreclosure-prevention program

ByABC News
January 16, 2009, 3:09 PM

NEW YORK -- Chase said its expansion of its foreclosure-prevention program could cover an additional $1.1 trillion in investor-owned loans, including mortgages held in securitizations, or bundles of mortgages that had been sold to investors.

The move expands the program from mortgages Chase owns to those that Chase services by collecting homeowner payments and distributing the money to investors.

Chase says it "believes it can legally modify the vast majority of mortgages owned by investors consistent with the relevant investor agreements and the best interests of investors, and intends to make modifications where appropriate. Chase will continue to seek investor approval in the small number of situations where investor agreements contain specific terms that may limit modification actions Chase can take."

Charles Scharf, chief executive of retail financial services at Chase, said the company "worked with investors, trustees, government officials and other interested parties to fashion an approach to foreclosure prevention efforts that will work for investors and homeowners."

Since October's announcement of the foreclosure prevention program involving Chase-owned loans, Chase has delayed starting foreclosure on more than $22 billion of mortgages involving more than 80,000 homeowners so it could review them for possible modifications to help borrowers, the company said.

Through that program and other efforts, Chase said, it has prevented about 330,000 foreclosures since early 2007, primarily by modifying loan terms.