JPMorgan Chase reported that it has provided more than half of the consumer relief required in just one year as part of a settlement with the government, according to a report released Tuesday.
The internal review group for the New York-based megabank asserted in the third Chase Consumer Relief Update, compiled by Monitor Joseph A. Smith, Jr., that Chase has earned $2.2 billion in consumer relief credit from the period of October 1, 2013, to September 30, 2014.
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. If verified as accurate by the Monitor, the amount of $2.2 billion in consumer relief for the one-year period would satisfy more than half of the required amount.
The consumer relief Chase provided has come in the form of principal reduction, loan modification, and refinancing for borrowers facing foreclosure, according to the report. The breakdown of the $2.2 billion in consumer relief is as follows: $555.88 million in modification – forgiveness/forbearance, $791.76 million in rate reduction, and $898.04 million in low to moderate income and disaster area lending.
Chase's internal review group reported to the Monitor that the bank had provided nearly $13.8 billion worth of gross consumer relief to nearly 112,000 borrowers year-to-date as of September 30, 2014. The majority of that $13.8 billion came in the form of low to moderate income and disaster area lending, which Chase provided approximately $11.9 billion to about 68,400 borrowers for the first nine months of 2014.
"We are pleased to have provided $2.2 billion in credited relief – more than half of the required $4 billion – in less than a year," a spokesperson from the bank said in a prepared statement. "To date, Chase has helped more than 111,000 families through $13.8 billion in total mortgage relief, including $1 billion in mortgage rate reduction and nearly $386 million in first lien principal forgiveness."
Chase's $13 billion settlement with the government in November 2013 remained a record until Bank of America settled for $16.65 billion in August 2014 over similar claims of selling faulty mortgages.