JPMorgan Chase is reducing home loan interest rates and cutting mortgage debt balances with nothing more than a homeowner's signature, and sometimes even that isn't required
No more faxing documents over and over again or waiting months for an answer.
The plan, which is ramping up nationally for eligible Chase-owned loans, is so easy that some homeowners think it's a hoax.
When a client of Wellington foreclosure defense attorney Malcom Harrison got a letter from Chase offering to cut his interest rate and loan debt without a lengthy paperwork exchange, he brought it to the office to see if it was authentic.
"He asked if it was for real or a joke," Harrison said. "After some checking and phone calls we verified it was for real."
Nearly 8 percent of Chase's home loans are in Florida.
Chase's program has two main components. Homeowners whose mortgage payments are seriously delinquent may get a letter offering them a lower interest rate, principal reduction or both, and all they have to do is sign and return the offer.
It's even easier for homeowners who owe more on their mortgage than their home is worth but have been current on their payments for at least a year. Chase will reduce the interest rate on its own, sending the homeowner their new lower payment amount with no effort needed on their part.
The average savings is $300-a-month for homeowners current on payments.
"Chase is taking a proactive approach to helping homeowners," a statement from the lender said. "We are sending modification offers, many of which include principal forgiveness, to thousands of families that are struggling with their mortgage payments."
Chase is part of the 49-state attorneys general settlement announced in February, which requires it to provide about $4.2 billion in mortgage relief to homeowners. Nationally, the $25 billion deal with Chase, Wells Fargo, Citigroup, Bank of America and Ally Financial could provide up to $40 billion in cash, refinances and principal write-downs to homeowners.
Harrison said the settlement is one motivator, but that lenders are also realizing it's better to have a functioning loan than another foreclosure on their books.
Chase gave another client of Harrison's a $152,000 debt reduction on his mortgage and lowered his interest rate to 3 percent.
"I think they are becoming more realistic about the real estate and job market," Harrison said. "At the end of the day it's always, always better to have a performing loan."