Here’s an update the progress of banks and homeowners facing foreclosures. Courtesy of Michael Steinberg at Click Broker. 
JP Morgan Meets WaMu Homeowners Face to Face
Three cheers for JP Morgan (JPM)! I recently wrote "Banks Need to Show Respect to Delinquent Homeowners", complaining that Wells Fargo (WFC) was using third party non-profit organizations to assist in mortgage modifications, instead of dealing directly with their customers. The courts forced Bank of America (BAC) to deal directly with Countrywide mortgagees and FDIC Chairwoman Sheila Bair has led the way with IndyMac Federal Bank. Now Bloomberg “JPMorgan to Modify Mortgages to Limit Foreclosures” is reporting that JP Morgan will deal directly with Washington Mutual’s delinquent homeowners. (Bloomberg update.)
It is only fitting that JP Morgan shows deference to Bair when the FDIC gifted them with WaMu the bank, without the excess baggage and debt of WaMu the bank holding company. Bair has been far more vocal in demanding social responsibility and accountability from their bank merger beneficiaries than either Treasury Secretary Paulson or Federal Reserve Chairman Bernanke. JP Morgan CEO Jamie Dimon has shown better political acuity than his mega bank colleagues. Dimon has already taken his WaMu markdowns and has no need to hide behind HOPE NOW.
JP Morgan is establishing 24 counseling centers to assist WaMu customers face to face in high delinquency areas. The two year program is expected to modify $70B in mortgages for 400,000 families. JP Morgan claims it has already modified $40B in mortgages for 250,000 families. They will also donate or substantially discount 500 (of what are probably worthless) homes to community groups.
The program is limited to WaMu customers “showing willingness to pay” that “intend to honor their commitments”. WaMu’s “Need Help with Your Mortgage?” web page has the “Borrower Assistance Form” where customers can explain their circumstances. In homage to the Paulson-Bernanke team’s love of the opaque, JP Morgan does reveal its negotiating guidelines. The customer does not know in advance the rules of this game which is demeaning. In this case, JP Morgan is coming up short of Bair at IndyMac.
Disclosure: Author is long BAC and WFC.
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