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Loan Mods With Chase Going Nowhere Fast

The new data the Treasury Department released show a number of problems with the mortgage modification program. But JPMorgan Chase leads the pack when it comes to those stuck in loan mod limbo.

JPMorgan Chase, the data show, has the most homeowners waiting more than six months for a final answer on whether they’ll get a permanent modification. (What we still don’t have data on is how many many homeowners have applied for a modification to begin with and how long they’ve waited.)

Although we’ve been providing estimates on this backlog for months, this was the first time the Treasury had divulged the exact numbers. Only one other servicer, the relatively small Saxon, has a higher proportion of homeowners who’ve been waiting for months to hear whether their trial modifications will become permanent.

Forty-five percent of all trial modifications that Chase has begun—which are supposed to last no longer than three months—have dragged on for at least six months without a final answer from the bank. (See how other banks are doing.)

The especially large backlogs at Chase and Saxon stem from the disproportionate number of trials both servicers began in the first months of the program. JPMorgan began about 106,000 trials in the program’s first four months (through August of 2009). In the eight months since then, only 83,000 homeowners have begun trials. The same is true of Saxon: it began 29,000 trials in the first four months, and only 11,000 since. A large proportion of those homeowners remain stuck in those trials.

Treasury officials have attributed the backlogs largely to the fact that servicers were initially allowed to begin trials without first verifying homeowners’ incomes. Treasury allowed servicers to do that in order to boost the number of trials in the program’s first months, and recently implemented guidelines to require documentation of income before a homeowner can start a trial.

Christine Holevas, a Chase spokeswoman, said she expected that measure to “dramatically improve the approval rate.” The change has already dramatically reduced the number of homeowners who are beginning new trial mods.

Treasury’s early decision to allow homeowners to get trial modifications without verifying their income is far from the only reason Chase has left so many homeowners in limbo. We’ve done a number of stories that detail other problems homeowners have experienced with Chase.

Chase is of course far from the only bank and servicer with which homeowners have been having problems. Take a look at our breakdown of the data, and you can see vastly differing results at the different servicers. We’ll continue to track the program and seek to understand the reasons behind the differences.

Source: ProPublica

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  • V WHITE

    I started this process back in 2008! I went into a forebearance agreement, reducing my mortgage a little. I sent the FIRST loan modication documents (faxed) on 12/07/09. For months I was told to keep sending my payments. I was told they were backed up and would get back to me. I would call to find out the status of my modication application and again, the same answers. So I have been sending my payments and about a few months ago, I started getting calls from Chase reps. I would explain I was waiting for an answer regarding the modification. They would tell me that there is no information on my account and if I want to be considered for a loan modication they can send me documents to start the process! ARE YOU KIDDING!! REALLY???

  • http://jasminepw.blogspot.com Jasmine

    We waited four months before Chase denied our loan modification. Their answer, ‘Your hardship is not of a permanent nature.’ Well, they were right; things got worse.

    Because my husband’s been out on disability for six months, we now have to cover health insurance costs. (I’m on permanent disability.) Also the 45% of his salary his employer was covering ceased. (State disability is covering 55%.)

    He hopes to return to work in a month or so, but with out-of-pocket medical costs that insurance didn’t cover, we just can’t afford the $1400 mortgage payments. We’re so disgusted with Chase, and no longer wish to keep our upside-down home, we’re considering walking away.

  • margaret murray

    I’ve been waiting for over a year for Chase to finalize my modifacation, they reduced my interest rate by 1 point and my mortgage payment was only 100.00 less per month on top of that my mortgage banance increased by over 6,000.00 and my home is worth much less than I paid for it over 7 years ago. It may be better for me if I just walked.

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