Chase Home Finance Trial Loan Modification Never Ends - Will They Ever Approve a Permanent Loan Modification?

by Paco
(Miami)

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Chase Home Finance Trial Loan Modification Never Ends - Will They Ever Approve a Permanent Loan Modification?

I entered into a 3 Month trial loan modification 06/2009 with Chase Home Finance. I also submitted all the requested documentation and received verification to that effect from Chase.

After 9 payments, all on time, I received a turn down letter which also requested updated documentation for them to re-evaluate my request for permanent loan modification.

The updated docs were sent immediately. In a subsequent telephone conversation with the Chase Home Finance, Chase again verified receipt of the updated docs and I was told to continue to make the agreed 3-Month Trial Loan Modification payments.

Two months and two payments later, no further news from Chase.

I have continued to send the trial period payments even after the turn down letter of 2 months ago.

My question is: Has Chase modified any mortgage after a re-evaluation? Even when all the figures remain the same as on day one. Is their request that I continue making payments some kind of a stall tactic that will eventually lead nowhere?

Chase Mortgage Loan Modification Answer:

by Chase Mortgage Loan Modification Expert - Dan North

That is not an uncommon tactic by lenders and they will normally try to keep your lower payments as a trial modification indefinitely. This is primarily for accounting reasons and Banking Regulations. Once your mortgage is permanently modified Chase will have to correct its books.

Chase Home Finance Reasons Not To Make Your Modification Permanent

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.