Two of the home mortgage and bank giants are resisting the Obama Administration’s plans to help reduce mortgage balances for struggling American homeowners. In essence, the home mortgage relief program starts by helping individual borrowers, but as the relief effort spreads is expected to help curb the foreclosure rate that is sweeping the nation.
'''The Two Banks'''
You are likely to recognize the names of the two banks putting up the fight. It’s JPMorgan Chase and Wells Fargo, both which have undergone mergers of their own in the past few years (JPMorgan with Chase and Wells Fargo with Wachovia). While the president’s plan includes having mortgage lenders reduce the balance of the mortgages owed by struggling borrowers, in order to make their home mortgage payments more affordable, thus keeping them from winding up in foreclosure, JP Morgan Chase and Wells Fargo predict a different outcome.
'''Home Mortgage Relief Outlook'''
The two big U.S. banks, JP Morgan Chase and Wells Fargo, say they are resisting the Obama Administration home mortgage relief efforts because reducing the mortgage balances actually entices borrowers to borrower more than they can truly afford because they know that the federal government will be there to bail them out. Both bank representatives went on to say that the home mortgage relief plan could have the opposite effect of its intentions. Instead of cutting the costs for homeownership, future homeowners may end paying higher prices to accommodate for all of the home mortgage reductions put in place with the new relief plans.
Executive officers for both JP Morgan Chase and Wells Fargo are currently appearing before Congress to state their side of the issue. The presentation of facts is being made to the panel responsible for issuing a report on performance of banks the week of April 19.
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