JPMorgan Chase & Co. on Tuesday announced new programs geared toward military customers and veterans, and apologized for overcharging thousands of active-duty service members on mortgages, and improperly foreclosing on more than a dozen.
The steps include a program making certain military personnel eligible for reduced-rate mortgages; enhancing a mortgage modification program for personnel who are having trouble making payments; and a pledge not to foreclose on any active personnel while they’re deployed.
JPMorgan Chase Chairman and CEO Jamie Dimon said those programs and other initiatives “are a start, but in no way a finish” to address the bank’s recent missteps involving military clients.
“This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration on that track record,” Dimon said in a news release. “We deeply apologize to our military customers and their families for these mistakes. We cannot undo them, but we can take accountability for them, fix them and learn from them.”
The New York-based company admitted the mistakes last month, including breaking a law that limits fees and interest charged to active-duty service members. Service members on active duty can’t be charged more than 6 percent for most debts that they incur before they are deployed. Their homes can’t be foreclosed on until after they return from active duty.
On Feb. 1, the head of a new government office charged with protecting military personnel from financial tricks and traps wrote CEOs of the 25 biggest mortgage banks. In the letters, Holly Petraeus said the CEOs needed to make sure their employees understand military legal protections. Petraeus heads the Office of Servicemember Affairs within the government’s new Consumer Financial Protection Bureau.
Her letter came after the violations involving mortgage rates and foreclosures were reported by NBC News.
Here’s a look at some of the steps JPMorgan announced Tuesday:
Mortgage rate reductions: Beginning April 1, Chase Home Lending, the bank’s mortgage business, will implement a rebate or similar program for military personnel protected by pricing caps under the Servicemembers Civil Relief Act. Eligible borrowers may have their mortgage rate reduced to 4 percent while on active duty, and for a year afterward. That maximum rate is 2 percentage points lower than the 6 percent rate current required under the act.
Loan modifications: In April, Chase will enhance a program to modify mortgage terms for military borrowers who are delinquent or having trouble making payments. The program is open to all members of the military who have served on active duty as far back as Sept. 11, 2001. The program will go beyond the requirements of the government’s current mortgage modification initiative, the Home Affordable Modification Program.
Home ownership assistance: The bank said Chase will not foreclose on any currently deployed active military personnel. The change goes beyond current requirements of the Servicemembers Civil Relief Act. Those requirements protect military borrowers against foreclosure only if they took out their loans before going on active duty. Chase also will donate 1,000 homes to military and veterans over the next five years through non-profit partners. By the end of this year, Chase will open five new homeownership service centers in cities near the following military bases: Fort Hood, in Texas; Naval Station Norfolk, in Virginia; Fort Bragg/Pope Air Force Base in North Carolina; Camp Lejeune in North Carolina; and Fort Campbell in Kentucky.
Veterans jobs: JPMorgan will form an alliance with other corporations to commit to hiring 100,000 military and veterans over the next 10 years.
Shares of JPMorgan rose 49 cents, or 1.1 percent, to $47.03 in midday trading.