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Eight months after striking a landmark $13 billion deal with the government over faulty residential mortgage-backed securities (RMBS), JPMorgan Chase has started to make headway in the consumer relief provision of the agreement, the settlement's monitor reported.
Joseph A. Smith Jr., who also oversees the 2012 National Mortgage Settlement between five major mortgage servicers and 49 states, said Tuesday that Chase has provided more than $6.3 million so far in credited consumer relief, with nearly $5.1 million coming from cuts to borrowers' principal loan amounts and the rest coming from forbearance actions.
The crediting formula includes separate calculations for the type of relief provided and the ownership of each loan. Other potential credits include interest rate reductions and lending activities to hard-hit areas or low-income borrowers.
Under the terms of last year's settlement, the bank agreed to distribute $4 billion in consumer relief by the end of 2017. Smith's report marks the first leg of Chase's efforts.
The monitor's calculations are based on a sample pool of 100 loans Chase submitted to ensure its testing procedures were appropriately designed.
Chase also informed Smith it has provided creditable relief to borrowers on loans not included in its submission. That additional activity will be reported to Smith in August.
"I look forward to sharing additional results in my next public report on Chase's consumer relief activity before the end of the year," Smith said. "I am honored to have been chosen to monitor this settlement, and my colleagues and I will do our very best to justify the faith the parties put into our work."
