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JPMorgan Chase Supports Obama Mortgage Modification Plan

March 13th, 2009
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NEW YORK, March 4, 2009 - JPMorgan Chase announced today that it strongly supports the Administration’s mortgage modification program, as detailed today.

“This builds on the efforts we have already implemented and extends them to more struggling homeowners and provides us and other servicers more options to keep families in their homes,” said Jamie Dimon, Chief Executive Officer of JPMorgan Chase & Co. “The plan appropriately balances the interest of homeowners, mortgage servicers and investors. As a result, more families will be helped with long-term and sustainable solutions through a consistent process, including a verification of income.”

We support the program because:

The guidelines establish a clear, fair and consistent set of standards for all servicers to follow.

It is intended for the right borrowers: those with mortgages below $729,750.
All borrowers must fully document their income.
All borrowers must clearly demonstrate financial hardship.
It covers verified owner-occupied homes only.
The owners of the mortgages will be confident that servicers will follow owners’ best economic interests in making modifications.
“JPMorgan Chase believes that this program, along with the fiscal stimulus plan and the TALF program, are all strong steps to improve both the economy and the financial system and to help those who are deserving and in need of assistance,” Dimon said.

“There is no silver bullet,” he said. “The thoughtful and rapid roll-out of various programs is the only intelligent way to begin to solve these problems. These mortgage modifications are economically and morally the right thing to do for individual customers. It is the respectful way in which we all would want to be treated. We will work hard to incorporate the new criteria into our own loan modification process to quickly help customers, and we urge all to participate in this plan as soon as possible.”

“This program maintains the essential principle that individuals, businesses and corporations should pay their loans if they can afford to do so,” Dimon said. “We believe this program’s completeness eliminates the need for judicial modification in bankruptcy, but if legislated, judicial modifications should be consistent with this plan and only for borrowers who couldn’t qualify or were not offered a modification.”

“Extraordinary times need extraordinary measures. It is time to implement this program - even if it’s not perfect in everyone’s view - and move on,” Dimon said.

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US Bank help customers refinance and modify mortgages

March 12th, 2009
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US Bank is participating in the Homeowner Affordability & Stability plan which the U.S. Treasury Department recently announced details of the program. This initiative allows eligible borrowers to refinance or modify their existing first mortgage.

Refinance if all of the following are true:
1. You have a Freddie Mac or Fannie Mae loan. If you’re not sure, freddiemac.com/avoidforeclosure or fanniemae.com/homeaffordable.
2. You have not been 30 or more days late on your mortgage payment in the past 12 months
3. You believe the amount you owe on your first mortgage is about the same or less than the current value of your home

Loan Modification if all of the following are true:
1. You occupy the home as your primary residence
2. The amount you owe on your first mortgage is less than or equal to $729,750
3. You are already delinquent in your payments or you are having difficulty paying your mortgage due to a significant increase in your monthly payment, a reduction in income, or hardship that has increased your expenses
4. You obtained your current mortgage before January 1, 2009

Call US Bank at 866-932-0462

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Ocwen Participates in Making Home Affordable Program

March 12th, 2009
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Ocwen Mortgage has claimed to successfully help over 70,000 people resolve mortgage delinquency and foreclosure issues for 2008.

The following are their basic requirements to modify eligible mortgage under the “Making Home Affordable Program.”
1. You have a current or foreseeable financial hardship
2. You live in the property as your primary residence
3. Your loan must be a 1st lien
4. You must be able to confirm that you do not have the sufficient cash or other readily available assets to make your monthly mortgage payments
5. Loans must have been originated on or before January 1, 2009

Click here to apply for mortgage assistance with Ocwen

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Record Mortgage Volume for Wells Fargo, Post-Wachovia

March 1st, 2009
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January 28, 2009 – December, 2008 was among the best months on record in new mortgage applications at Wells Fargo and Co., witbh a surge of new refinance activity and bargain-hunters financing short sales and foreclosure buy-outs. The San Francisco-based financial giant originated $230 billion during 2008, according to earnings data reported today.

Fourth-quarter residential production was $50 billion, off from $51 billion in Q3 and $56 billion a year ago. Refinances accounted for 68 percent of fourth-quarter volume, jumping from the prior period’s 39 percent. Fourth-quarter activity included $28 billion in third-party originations at Wells Fargo Home Mortgage, off from the prior quarter’s $25 billion. Retail business fell to $20 billion from $23 billion.

New loan applications during the most recent quarter reached $116 billion, climbing from $83 billion in the third quarter. The application pipeline ended last month at $71 billion — including $5 billion from Wachovia — climbing from $41 billion at the end of September. The increased 1003 activity is expected to push first-quarter originations higher.

During the last half of the quarter, we experienced a significant increase in refinance applications as mortgage rates declined significantly in response to the proposed actions by the Federal Reserve to lower mortgage rates,” Wells Executive Vice President Mark Oman said in the report. “Applications of $63 billion for December were the fourth highest month on record in what is traditionally a seasonal slow period.”

Wells said its mortgage market share reached 12 percent based on third-quarter data, rising from 10 percent in the third-quarter 2007. The acquisition of Wachovia Corp. on Dec. 31 will likely boost the share and put the combined institution in contention for the top U.S. residential lending spot.

“We were able to increase our lending to creditworthy customers because we were building capital and shrinking our balance sheet in 2005 and 2006 when credit spreads were unrealistically low and were not priced for their underlying risk,” Wells Chief Executive Officer Joseph Stumpf stated in the report. “We did make some mistakes, but, for the most part, we maintained our credit discipline.”

The mortgage servicing portfolio under management was $2.154 trillion on Dec. 31, jumping from $1.580 trillion on Sept. 30. The year-end figure included $1.860 trillion in loans serviced for others and a sub-servicing portfolio of $0.026 trillion. Backing out an estimated commercial mortgage servicing portfolio of $0.180 trillion as of June 30, 2008, the residential portion of the servicing portfolio was around $1.974 trillion at the end of last year, compared to $1.376 trillion a year earlier.

Wachovia contributed $271 billion to the total servicing portfolio.

Residential mortgages owned by Wells ended last year at $247.9 billion, soaring from $77.9 billion at the end of the third quarter and reflecting the acquisition of Wachovia. Junior-lien holdings rose to $110.2 billion from $75.6 billion. The total home-equity portfolio, including Wachovia holdings, was $129.4 billion at December’s end.

Non-accruing residential mortgages climbed to $2.6 billion on Dec. 31 from $2.0 billion on Sept. 30, while non-accruing junior liens were $0.9 billion, up from $0.8 billion.

The portfolio of commercial real estate and construction loans at Wells was $68 billion, while Wachovia’s commercial holdings were $70 billion.

Wells said it took a $413 million write down on increases to its mortgage repurchase reserve and aged loans in its mortgage warehouse. Home-equity charge-offs were $2.2 billion, and increases in junior-lien losses aren’t expected to improve until home values stabilize

During all of last year, company-wide earnings — excluding Wachovia — were $2.8 billion, tumbling from $8.1 billion in 2007. The fourth-quarter loss was $2.5 billion, worse than the $1.6 billion third-quarter profit and a profit of $1.4 billion in the fourth-quarter 2007.

 

 

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Fed Urges Banks to Cut Dividends

March 1st, 2009
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Bank dividends may soon be a thing of the past if the Federal Reserve has its way.  The Fed is urging Wells Fargo and dozens of banks getting TARP bailout funds to consider future loan losses and the need to bolster capital before paying dividends to shareholders.

This urging came in a letter from the Fed to its regional supervisors.  The letter, made public Thursday, said banks  “should reduce or eliminate dividends” when earnings decline or the economic outlook deteriorates.

Some banks resisted dividend cuts even as regulators grew increasingly concerned about their ability to withstand losses.

The Fed told banks in November that it was concerned they might not be using the rescue funds appropriately. Wells Fargo, US Bancorp and PNC Financial Services Group are among banks that have maintained their dividends as loan losses surged and earnings plummeted.

On Monday JPMorgan Chase & Co., the second-largest US bank, slashed its dividend by 87 percent to 5 cents from 38 cents.

An earlier draft of the Fed’s letter, described by two people who saw it, urged banks to put their capital into making new loans rather than paying dividends. That stipulation was dropped from the final version of the letter.

The letter made public said each bank should “consider the potential impact on its earnings and capital base from current and prospective economic conditions.”

Banks also were warned to “inform the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period,” according to the letter. Such a requirement has been less strictly enforced in recent years, Shaffer said.

When Citigroup Inc. and Bank of America Corp. sought additional aid after getting $25 billion each in October, the government agreed on the condition that they cut their dividends to a penny a share. The two banks got an additional $20 billion each from the $700-billion program.

Wells Fargo, which took $25 billion of TARP funds, has maintained its dividend. So have Pittsburgh-based PNC, which took $7.6 billion; Minneapolis-based US Bancorp, which received $6.6 billion; and McLean, Virginia-based Capital One Financial, which got $3.6 billion.

Goldman Sachs Group Inc., which got $10 billion of TARP funds, is still paying a quarterly dividend equivalent to 35 cents a share. Morgan Stanley, which also got $10 billion, pays 27 cents a share.

Spokesmen for Wells Fargo, Goldman Sachs, Morgan Stanley and PNC declined to comment. “These funds are being used in a manner consistent with promoting economic growth,” Capital One spokesman Julie Rakes said.

The Fed’s new guidance may provide cover to bank CEOs who know they need to cut their dividends to preserve capital, and have resisted doing so for fear of upsetting shareholders or conveying a sign of weakness to depositors.

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