Tuesday, December 08, 2009

JPMorgan: 200,000 HAMP Mods Offered, Only 2% Permanent

by Bill McBride on 12/08/2009 05:38:00 PM

The following information is from the JPMorgan Chase presentation today at the Goldman Sachs Financial Services Conference.

Modifications Click on graph for larger image in new window.

The first slide (page 18 in the presentation) shows the progress of the various modification programs at JPM Chase. Only 2% of all trial modification have become permanent (4,302 or 199,033 trial mods).

29% fail to make all their payments during the trial modification program. Another 51% fail to submit all documentation.

The other modification programs are having more success.

Weak Loan Demand The second slide is even more important (slide 15 in the presentation). This shows the weak demand for loans in all categories.

  • Mortgage 3Q09 YTD applications down 10% YoY

  • Card 3Q09 YTD sales volume down 7% YoY

  • Average large corporate loans down 24% YoY to $66.3B at 3Q09 from $86.6B at 3Q08 due to lower demand and increased access to capital markets

  • Average Mid-Corporate and Middle Market loans down 13% YoY to $51.9B at 3Q09 from $59.6B at 3Q08 due to lower demand and utilization rates

  • Business Banking 3Q09 YTD origination volume down 66% YoY due to lower demand and tighter underwriting standards

    The presentation isn't all gloomy (see page 14):
    Overall Commentary

  • Some initial signs of stability in consumer delinquency trends, but we are not certain if this trend will continue

  • Prime and subprime mortgage delinquencies impacted by foreclosure moratorium, extended REO timelines and trial modifications