JPMorgan Chase has fulfilled nearly all of its required $4 billion consumer relief obligation under the terms of the 2013 Residential Mortgage-Backed Securities Settlement, according to a report from the office of independent monitor Joseph A. Smith, Jr released Tuesday.
In Smith’s seventh report on Chase’s progress toward fulfilling the settlement obligations, he credited the bank with more than $126.2 million in consumer relief to 3,695 borrowers through the end of the second quarter of 2015 (June 30, 2015).
The bank is well on track to fulfill its consumer relief obligation under the terms of the settlement by the deadline of December 31, 2017. Through seven reports covering up until the end of Q2 2015, Smith and has team have credited JPMorgan Chase with more than $3.68 billion in consumer relief to 161,802 borrowers, giving the bank two and a half years (starting with the beginning of Q3 2015) to provide the remaining $320 million.
“My team and I performed an in-depth review of Chase’s consumer relief activities. As a result, I have credited Chase with $3.68 billion in consumer relief,” Smith said. “I will continue to monitor and report on Chase’s progress toward providing $4 billion in credited consumer relief by December 31, 2017.”
Chase released the following statement regarding the Monitor's report: “We continue to help thousands of families become homeowners and assist those who may be struggling. We have helped over 165,000 families through nearly $20 billion in total mortgage relief.”
All of the consumer relief Chase provided in Q2 2015—all 3,695 loans and $126.2 million—was in the form of forgiveness or forbearance. About $52.9 million of the relief came in the form of principal forgiveness on first liens (covering 851 loans); about $24.7 million of the relief came in the form of forbearance on first liens (covering 1,540 loans); and about $48.6 million of the relief came in the form of principal forgiveness on second liens, including extinguishments.
The total of consumer relief Chase has provided in forgiveness/forbearance is $1.84 billion, approximately half of the relief the bank has provided through the end of Q2 2015. Chase has also provided consumer relief in the form of $874.4 million in rate reduction and $1.17 billion in low-to-moderate income and disaster area lending through the end of Q2 2015.
Chase self-reported an additional $206.2 million in consumer relief for the third quarter of 2015, which Smith and his time are in the process of confirming. Should this amount be confirmed, it would give the bank $3.88 billion in consumer relief toward the obligation. Smith said he will report his team’s findings in the spring.
Chase settled with the government in November 2013 for a then-record $13 billion amid claims that the bank, along with Bear Stearns and Washington Mutual, sold faulty residential mortgage-backed securities to investors prior to the financial crisis. Chase was required to make $9 billion in direct payments to government agencies and five states and provide $4 billion in consumer relief. Chase’s $13 billion settlement remained a record amount for a single private institution settling with the government until Bank of America settled for $16.65 billion in August 2014 over similar claims of selling faulty mortgage-backed securities.