JP Morgan Chase (NYSE: JPM) announced Monday it has joined the government’s second-lien relief program, a program that aims to provide relief on borrower’s “piggyback” loans, an option that was unavailable in previous modification programs.
The program is part of President Obama’s $75 billion loan assistance initiative that is run under the Home Affordable Modification Program (HAMP), and though it was launched last spring, failed to make any headway as no financial institutions signed on to be part of the program. That changed when Bank of America (NYSE: BAC) announced earlier in the year that it would participate. Well Fargo (NYSE: WFC) followed a while after, announcing last week it would participate.
JP Morgan Chase is the latest big bank to join the program that may help boost modification efforts on a whole as lenders who provided second mortgages hold veto power on modifications of primary mortgages. Now that second mortgages are eligible for modification, those lenders may likely approve more modifications.
“Piggy back” loans are second loans borrowers would get to use as a down payment on a home as opposed to making a traditional down payment out of pocket.
Mortgage modification efforts have reached millions of homeowners, but are still viewed as slow going on a whole. JP Morgan Chase offered 600,000 loan modifications to homeowners in 2009.
