Austin Kilgore | 01.20.09 www.dsnews.com

JPMorgan Chase & Co.'s Chase Bank division will begin offering mortgage modifications to the $1.1 trillion in investor-owned loans, including investor-owned mortgages held in securitizations, that it services.

The announcement comes after an internal review of investor agreements. Chase said it can legally modify the majority of mortgages owned by investors consistent with the relevant investor agreements and the best interests of investors.

Chase said it will continue to seek investor approval on some cases where investor agreements contain specific terms that may limit modification actions it can take.

Chase previously announced plans to increase modifications for mortgages it owns that are in danger of foreclosure, but this new announcement will significantly increase the scope and of its efforts, and has the potential to have a greater impact on the housing market.

“When homes are foreclosed, everybody suffers, so working aggressively to modify all loans –whether owned by Chase or owned by others – on terms that should work for the borrower, makes good sense for everyone,” Charles Scharf, CEO of Chase's Retail Financial Services division, said. “Our experience at Chase has shown that when mortgages are properly modified, using income verification and other appropriate criteria, they perform very well over time.”

Chase said it has prevented about 330,000 foreclosures, primarily by modifying loan terms, since early 2007.