Head of Chase mortgage: Foreclosure always last resort

Foreclosure is always the last resort and least desired option for delinquent mortgages, and JPMorgan Chase uses all possible remedies prior to starting any foreclosure process, according to an executive in the bank’s home loan office. And in most cases, no one is even living in the property any longer. Testifying before the Senate Committee on Banking, Housing and Urban Affairs Tuesday, David Lowman, chief executive for home lending, said the banking giant seeks to rectify all past-due mortgages but sometimes it isn’t feasible. “Sustainable modifications are not always possible,” Lowman testified. “There are some borrowers who simply cannot afford to stay in their homes, notwithstanding the modification programs and other foreclosure prevention alternatives available. There are other borrowers who are not seeking modifications. In the majority of cases that went to foreclosure sale in the last quarter, the properties were vacant or not owner-occupied.” He said Chase services about 9 million mortgages worth more than $1.2 trillion in all 50 states. Since the start of last year, Chase has offered almost 1 million modifications to struggling borrowers and has completed more than 250,000 permanent modifications under the federal Home Affordable Modification Program, the company’s proprietary modification programs, and modification programs offered by Fannie Mae, Freddie Mac, the Federal Home Loan Banks, the Federal Housing Administration and Veterans Affairs. Lowman said Chase has prevented more than 429,000 foreclosures since January 2009 through its remediation efforts, while the bank also foreclosed on more than 241,000 homes during the same period. The company didn’t find any errors in its foreclosure process after completing a review that was a result of the self-imposed moratorium instituted by the nation’s largest mortgage servicers earlier this year. Now the Congressional Oversight Panel has called on the Treasury Department to investigate documentation problems in the mortgage industry because it’s a threat that could call into question the validity of 33 million mortgages. “We have not found errors in our systems or processes that would have led foreclosure proceedings to be commenced when the borrower was not in default,” according to Lowman. He said the bank crafted a model affidavit that complies with applicable local laws that “will be used in every case, and that will limit factual assertions to those within the personal knowledge of the signer and eliminate any legal conclusions that are outside the signer’s personal knowledge.” Lowman said Chase plans to implement extensive and enhanced procedures to ensure employees who execute affidavits verify the contents only in the presence of a licensed notary. Write to Jason Philyaw.