One More Good Reason Banks Don’t Make Modifications Permanent

Chase Home Finance Has MANY Good Reasons Not To Make Your Modification Permanent

You’ll find quite a few listed on this blog. This is just one more, certainly not the only one:

Right now your mortgage is on the books with a home value that fully covers the loan. Once the trial modification is made permanent, Chase will have to update the accounting to the actual value of the home. If your mortgage is upside down, your mortgage turns from an asset to liability on your lender’s books. This lowers what reserves are available to make loans. If all home loans were corrected to the actual value of the homes Chase would be bankrupt, in fact every bank in the US would be bankrupt.

Now you know part of the reason that lenders are so reluctant to make loan modifications. Here is how the stats are breaking down on loan modifications. Right now 75% of all loan modifications that are made permanent under the Making Home Affordable Program are on prime mortgages and not on sub-prime mortgages which are the majority of Americans that are in trouble.

Chase Home Finance is participating in the HAMP Program but their statistics are not publicly reported by the Government. The stats of JP Morgan Chase are publicly reported and since the Loss Mitigation Department is the same for JP Morgan Chase and Chase Home Finance I will use their statistics to answer your question.

JP Morgan Chase as of the Feb 2010 Report has made 179,645 trial loan modifications and 19,385 permanent loan modifications. This is roughly 10.8% of all trial loan modifications made permanent. Now factor in that 75% of all permanent loan modifications where on prime loans that means that 4,846 permanent loan modifications were made for homeowners that needed help the most.

2.7% Are Helped – What About The Other 97.3% Who Need Help?

There is something you can do about it. First you need to find out if the Government owns or guarantees your loan:

Is your Mortgage owned or guaranteed by Freddie Mac

Is your Mortgage owned or guaranteed by Fannie Mae

If you have an FHA or VA loan you most likely would know that information but if you are not sure the easiest way to find out is ask your lender by calling the number on your mortgage statement.

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