JPMORGAN CHASE TO GIVE $4 BILLION TO HELP DISTRESSED MORTGAGES

It was recently announced that JPMorgan Chase & Company settled a civil liability claim with the U.S. Department of Justice. Chase was sued for signing mortgages with a high probability of foreclosure, and selling them in bundles to unsuspecting investors. As the mortgages failed, the investments lost their value, and soon our whole economy was injured by the 2008 financial crisis.

This $13 billion dollar settlement is the largest settlement of fines and damages negotiated by the U.S. Government in a single civil suit. Illinois is to receive $100 million dollars of the settlement. The agreement requires Chase to allocate four billion dollars to consumers to help distressed mortgages and properties. HUD Secretary Shaun Donovan says that the settlement “could benefit more than 100,000 borrowers.”

About a billion and a half dollars of the settlement is to be made available to aid borrowers whose mortgage balance exceeds the value of their properties. Chase presumably would renegotiate the principal and possibly the interest rate for such mortgages. Another half billion dollars is to be made available to restructure mortgages to reduce monthly payments.

The remaining two billion dollars will be allocated to assist low and moderate income borrowers to obtain affordable mortgages in areas that been most affected by the housing crisis. Another portion of the settlement will be used to demolish abandoned properties in blighted areas.

If you have a Chase mortgage that you cannot afford, or if you are interested in getting a new mortgage, there may be money in the settlement for you. As of this writing, the deal had just been struck, so if you believe you might be eligible for the benefits under this settlement, contact Chase, or the Office of the Illinois Attorney General.

If you are worried about your stock in JPMorgan Chase, rest assured that much of the settlement will be tax-deductible for Chase, our nation’s largest bank.

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