Christmas is coming early for some struggling homeowners this year, as Chase Bank has been surprising them with mortgage interest rate breaks or principal reductions seemingly out of the blue. CNN Money reports, however, that Chase isn’t exactly jolly ol’ St. Nick. The bank has been forced to do this as part of the settlement to the massive class action lawsuit agains the five biggest U.S. banks:
As part of the $25 billion mortgage settlement that was struck between the nation’s five biggest banks and the state attorneys general and federal government, Chase had pledged $4.2 billion in mortgage relief for tens of thousands of borrowers by either reducing the interest rate or the principal owed (or both) on their loans.
Under the settlement, banks get more credit for modifications that are completed in the first year so the banks are trying to move quickly. By the time the deal was approved in April, Chase had already put together a team to mine through its mortgage paperwork and identify candidates who met the modification guidelines.
Initially, the bank had been sending offers to homeowners and waiting for their response, but “getting customers to respond was more difficult than the bank thought,” so instead they just go ahead and modify the mortgage and tell the homeowners about it afterward. It will likely be the only time in history that anyone gets unsolicited good news from their bank.