JPMorgan Chase & Co. (JPM) said on Monday that it will help jobless Michigan homeowners by contributing to the state’s Hardest Hit fund, which assists qualified borrowers to pay about half of their mortgage payments for up to 12 months. JPMorgan’s customers who are behind on their mortgage payments will be primarily helped by this aid, saving up to $9,000.
Following the setup of all the logistics by the Michigan State Housing Development Authority, JPMorgan will commence the program.
Following unemployed homeowners’ request, JPMorgan’s counselors will check the eligibility by asking basic questions and then send an application package to the borrowers. After homeowners return the application package with the required information, JPMorgan will start paying if the application is approved.
JPMorgan has already helped Michigan homeowners through its Chase Homeownership Centers over the last 18 months. The counselors had a face-to-face meeting with more than 4,400 distressed Michigan homeowners in outreach events across the state.
JPMorgan is the first major mortgage servicer to provide such face-to-face counseling in the hardest-hit areas. The company has met 140,000 homeowners in face-to-face counseling sessions nationwide.
Since 2009, JPMorgan has offered more than 900,000 mortgage modifications nationally to distressed homeowners through extensive initiatives with the help of the government.
However, last week, JPMorgan announced that it is holding up nearly 56,000 foreclosures in 23 states to examine whether some of its executives rushed through documents of homeowners without properly evaluating the authenticity of the information. Bank of America Corporation (BAC) has also joined JPMorgan to take similar actions.
Though a halt of foreclosures will have negligible impact on JPMorgan’s profitability, it could mar investors’ sentiments to a great extent. However, JPMorgan is expected to restore investor and customer confidence by helping jobless Michigan homeowners.
Apart from BofA and JPMorgan, many other financial institutions including Citigroup Inc. (C), Wells Fargo & Company (WFC), Ocwen Financial Corp. (OCN) and Marshall & Ilsley Corporation (MI) are involved in foreclosure prevention for homeowners.
JPMorgan currently retains its Zacks #3 Rank (short-term Hold rating), implying that the stock is expected to perform in line with the broader U.S. equity market in the near term. However, we are impressed to see some improvement in credit quality in the last three quarters. Therefore, we maintain our long-term Neutral recommendation on the shares.
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