![]() C H A S E F O R E C L O S U R E P R E V E N T I O N P R O G R A M Exhibit 99.2 |
![]() Chase already is helping families avoid foreclosure Systematically modifying interest rates on subprime ARMs owned by Chase Participating in national projects, including Fast Track and Project Lifeline Piloting proactive refinance offers for borrowers; offers may have Chase-paid costs, below market rates and/or principal deferment Borrower outreach Proactive modifications / refinance offers Active borrower outreach targets all borrowers with adjustable- rate mortgages (ARMs), including pay-option ARMs Working one-on-one with homeowners to understand their unique financial situations and develop viable, sustainable solutions Working with Hope Now and other members of the industry to increase borrower awareness of available resources 1 |
![]() Chase announces new actions to help families stay in their homes Systematically review the entire mortgage portfolio to determine proactively which homeowners are most likely to require help – and try to provide it before they are unable to make payments. Proactively reach out to homeowners to offer pre-qualified modifications. Establish 24 new regional counseling centers to provide face-to-face help. Add 300 more loan counselors so that delinquent homeowners can work with the same counselor throughout the process. Will add more counselors as needed. Create an independent process within Chase to review each mortgage before it is sent into foreclosure -- to validate each borrower was offered appropriate modifications. Not add any more Chase owned loans into the foreclosure process while implementing enhancements. Disclose and explain in plain and simple terms the refinancing or modification alternatives for each kind of loan, including using in-language communications. Expand the range of alternatives offered to modify pay-option ARMs. Offer discounts on or donate 500 homes to community groups or government programs. Use more flexible eligibility criteria and modification terms. 2 |
![]() Chase offers new alternatives for pay-option ARMs Option 2: Principal Forbearance / Rate Modification Option 1: Refinance into FHASecure / Conventional Option 3: Interest- only Period New 15- or 30- year fully amortizing mortgage Requires reasonably good payment history Borrowers in owned portfolios may qualify for lender- paid closing costs and / or principal forbearance Eliminate negative amortization; fully amortize over 30 years Provide principal forbearance to as low as 95% loan-to- value Reduce rate to as low as 2.0%-3.0% to meet target ratio of housing payment to income of 31-40% (capped at 50%) Step rate up to market in five years Create trial period Same as option 2, but if required by affordability test, reduce payment to ten-year interest- only Reduce rate to as low as 3.5% Option 4: Hope for Homeowners (not yet available) Requires elimination of second lien and principal write- down to 90% loan- to-value More stringent eligibility criteria than other modifications More time- consuming process for borrower 3 Choices for pay-option ARMs modification |
![]() Chase offers alternatives for subprime hybrid ARMs Option 2: Rate Modification Option 1: Refinance into FHASecure / Conventional Option 3: Rate Reduction / Term Extension New 15- or 30- year fully amortizing mortgage Requires reasonably good payment history Borrowers in owned portfolios may qualify for lender- paid closing costs and / or principal forbearance For owned loans, Chase unilaterally locks in initial interest rate for life of loan Similar program executed for investors at their request ASF Fast Track program freezes pre-reset rate for five years for securitized loans Analysis completed to determine affordable payment based on target ratio of housing payment to income of 31-40% (capped at 50%) Rate set to meet affordable payment Can be combined with term extension Income subject to verification Option 4: Hope for Homeowners (not yet available) Requires elimination of second lien and principal write- down to 90% loan- to-value More stringent eligibility criteria than other modifications More time- consuming process for borrower 4 Choices for subprime hybrid ARMs modification |
![]() Chase offers alternatives for subprime fixed rate loans Option 2: Rate Reduction / Term Extension Option 1: Refinance Into FHASecure / Conventional New 15- or 30- year fully amortizing mortgage Requires reasonably good payment history Borrowers in owned portfolios may qualify for lender-paid closing costs and / or principal forbearance Option 3: Hope for Homeowners (not yet available) Requires elimination of second lien and principal write-down to 90% loan-to- value More stringent eligibility criteria than other modifications More time-consuming process for borrower Analysis completed to determine affordable payment based on target ratio of housing payment to income of 31-40% (capped at 50%) Rate set to meet affordable payment Can be combined with term extension Income subject to verification 5 Choices for subprime fixed rate modification |
![]() What a Chase loan modification might look like ILLUSTRATIVE 6 Example proposed Chase-owned loan modifications Subprime ARM Pay Option ARM Home value at origination $200,000 $500,000 Current home value $170,000 $425,000 Original loan amount $160,000 $400,000 Current loan amount (including negative amortization) $156,632 $460,000 Current interest rate / option ARM payment rate 7.00% 1.25% Interest rate after reset 9.00% 5.75% Current monthly payment 1 $1,064 $1,623 New payment 1 $1,279 $2,757 Payment amount increase ("shock") $214 $1,134 Principal deferred by Chase $0 $56,250 Principal amount that payment is calculated on $156,632 $403,750 Modified rate 7.00% 5.00% Modified payment 1 $1,064 $2,167 Payment savings $214 $590 1 Interest and any principal only. Subprime modification assumes no term extension and 2/1 Hybrid ARM. |