Friday, October 31, 2008

``We will work with families who want to save their homes but are struggling to make their payments.''

Speaking of renegotiating mortgages. From Bloomberg:


"JPMorgan to Modify Mortgages to Limit Foreclosures (Update1)

By Elizabeth Hester

Oct. 31 (Bloomberg) -- 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.''

Okay. Sounds good.
The help will be:
1) lower interest rates
2) principal reduction
In either case, lower payments should be possible.

"The JPMorgan program is expected to help 400,000 families with $70 billion in loans in the next two years, JPMorgan said. The company said an additional 250,000 families with $40 billion in mortgages have already been helped under existing loan- modification programs.

The programs are aimed only at homeowners who ``show a willingness to pay,'' the bank said. ``Customers should continue to make mortgage payments to reflect their intent to honor their commitments.''

JPMorgan said it will also donate or offer a ``substantial discount'' on 500 homes to community groups in order to stabilize local markets."

Okay. Good. Moral problem solved with willingness to pay, and no government intervention here. Although, I believe that they are part of TARP.

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