The bank, which two weeks ago accepted a $25 billion cash infusion from the government, will examine loans and may agree to reduce interest rates or principal amounts, New York-based JPMorgan said Friday. It will also open 24 centers to provide counseling in areas with high delinquency rates.
It's unclear where the counseling centers will be located, but Utah, where foreclosure rates are relatively low, is unlikely to be one of the states that will receive special attention from JPMorgan.
"We don't have specific locations for the regional counseling centers, but we will open them where customers need them, fairly likely in states like California, Florida, Nevada, Arizona and Illinois, among other places," spokeswoman Mary Jane Rogers said.
In Utah, JPMorgan operates 34 JPMorgan Chase offices and 33 offices of Washington Mutual, the savings and loan it agreed to buy last month.
The bank does not provide information about its portfolio of distressed loans in the state.
The foreclosure readjustment program applies to customers of both companies. It is aimed only at homeowners who "show a willingness to pay," the bank said. "Customers should continue to make mortgage payments to reflect their intent to honor their commitments."
Congress has been urging financial-services companies to work with borrowers and avoid foreclosures, which rose to the highest on record in the third quarter. States pivotal to the Nov. 4 U.S. presidential election, including Florida, Ohio and Nevada, had some of the highest foreclosure rates in the nation, according to data compiled by RealtyTrac.
''Politics is playing such a huge role in this process, the banks have to be very cognizant of how they're perceived,'' said Charles Peabody, partner and research analyst at Portales Partners LLC in New York. ''What they want to do is show they deserve this good deal from the government by helping out the average man.''
Federal Deposit Insurance Corp. Chairman Sheila Bair has proposed a plan to guarantee mortgages to help stem foreclosures, according to two congressional aides briefed on the matter. Her idea is to use as much as $50 billion of the $700 billion financial-services industry bailout package approved by lawmakers this month.
The JPMorgan program is expected to help 400,000 families with $70 billion in loans in the next two years, the bank said. An additional 250,000 families with $40 billion in mortgages have already been helped under existing loan-modification programs.
Countrywide Financial Corp., the mortgage lender acquired by Bank of America Corp., agreed earlier this month to help about 400,000 customers facing foreclosure or having problems paying their loans as part of a settlement with 11 states over fraud complaints.
JPMorgan said Friday it would hire 300 loan counselors to help delinquent homeowners and employ about 150 people to review each mortgage before it's sent to the foreclosure process.
A total of 765,558 U.S. properties got a default notice, were warned of a pending auction or were foreclosed on in the third quarter, the most since records began in January 2005, according to Irvine, Calif.-based RealtyTrac, which sells default data.
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* Tribune reporter Paul Beebe contributed to this report.
