News: NY Unions Want Chase to Modify Mortgages

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The following is from The New York Times:

Unions to Press Chase on Modifying Additional Mortgages


Published: February 9, 2011

Leaders of two large New York City unions said Wednesday that they would push for their pension funds to sell their stocks and bonds in JPMorgan Chase if the bank did not help more struggling homeowners avoid foreclosure.

The declarations were part of a campaign by New York Communities for Change to force the bank to modify more mortgages.

Jon Kest, the group’s executive director, said Chase was singled out because it serviced a large number of mortgages in the city yet turned down a majority of requests for long-term mortgage modifications.

In the coming weeks, Mr. Kest said, elected and union officials and religious and community leaders would urge other investors to divest their Chase assets, and would stage weekly protests outside the bank’s headquarters in Manhattan.

John Samuelsen, president of Transport Workers Union Local 100, which represents the city’s transit workers, and Michael Mulgrew, president of the United Federation of Teachers, said they would urge their pension funds’ trustees to sell holdings in Chase if the bank did not allow more people to adjust their mortgages.

About $40 million of the Teachers’ Retirement System’s $40 billion pension fund is invested in JPMorgan Chase. The transit workers are covered by the New York City Employees’ Retirement System pension fund, which has $271 million in Chase stock and bonds, out of $39 billion in assets.

It is not clear whether the union leaders could successfully sway the pension boards, which include both union and government representatives.

By one measure, JPMorgan Chase is not out of step with other big banks. According to a Treasury Department report in December on its loan-modification program, which pays banks to modify mortgages by reducing interest rates or principal or extending the loan period, JPMorgan Chase permanently modified about 34 percent of the troubled mortgage loans it held that met eligibility criteria for relief, roughly the same as the average for all banks.

According to Mr. Kest, only 6 percent of 1,027 city homeowners who sought to reduce their mortgages with Chase between July 2008 and last December were able to get permanently modified loans. Michael Hickey, executive director of the Center for New York City Neighborhoods, a nonprofit group that provides mortgage counseling, said New Yorkers had more trouble getting modifications than homeowners elsewhere because their mortgages far exceeded the national average.

In a statement, a Chase spokesman, Thomas Kelly, said the bank, which inherited thousands of troubled mortgages when it bought Washington Mutual, had avoided foreclosures twice as often as it has foreclosed on homes, and had opened five centers in the New York area for mortgage counseling.

“Chase is doing everything possible to help homeowners stay in their homes,” Mr. Kelly wrote. “If we find we have made mistakes, we try to fix them.”