JPMorgan Chase announced that it will expand its mortgage modification program by including Washington Mutual and EMC Mortgage Corporation customers and by undertaking multiple initiatives designed to keep more families in their homes. Chase acquired WaMu’s mortgage portfolio in September and EMC’s portfolio in February.

Chase said it will systematically review its entire mortgage portfolio to determine which homeowners are most likely to require help, and try to provide it before they are unable to make payments. Chase also said it will not add any more Chase-owned loans into its foreclosure process while enhancements are being implemented.

As part of its enhanced modification program, Chase also plans to:

• Expand the range of financing alternatives offered to modify pay-option ARMs, including 30-year, fixed-rate loans with affordable payments, principal deferral, and interest-only payments for 10 years. All the alternatives eliminate negative amortization.
• Establish 24 new regional counseling centers to provide face-to-face help in areas with high delinquency rates, building on the success of one- and two-day Hope Now reach-out days.
• Add 300 more loan counselors, for a total of 2,500, so that homeowners can work with the same counselor throughout the process, improving follow-through and success rates.
• Create a separate and independent review process within Chase to examine each mortgage before it is sent into the foreclosure process, in order to validate that each homeowner was offered appropriate modifications. Chase will staff the new function with about 150 people.
• Offer a substantial discount on or donate 500 homes to community groups or through non-profit or government programs designed to stabilize communities.
• Use more flexible eligibility criteria on origination dates, loan-to-value ratios, rate floors and step-up features.

The enhanced program is expected to help 400,000 families with $70 billion in loans over the next two years.