JPMorgan Chase Warns Investors About Underwater Homeowners Walking Away
In a Monday filing with the Securities and Exchange Commission, JPMorgan Chase told investors and regulators that homeowners who owe more on their mortgages than their homes are worth may not continue to make their payments — even when they’re able to.
“Declining home prices have had a significant impact on the collateral value underlying the firm’s residential real estate loan portfolio,” the bank stated. “In general, the delinquency rate for loans with high LTV [loan-to-value] ratios is greater than the delinquency rate for loans in which the borrower has equity in the collateral.