|
Learn More About Woodstock |
|
|
|
| |
|
JP Morgan Chase (Current) |
|
|
|
Memorandum of Understanding of Community Reinvestment Goals
JP Morgan Chase and the Chicago CRA Coalition
upon the Acquisition of Bank One, NA
2004 through 2009
HOUSING AND MORTGAGE LENDINGPrimary Goals
JPMC
will seek to reach or exceed the market share ratio lending goals
depicted in the charts below, for each category of lending, including
originated loans. The Bank will report on its progress in mortgage
lending and small business lending by borrower characteristics and by
census tract. JPMC will not report its small business lending by race
until such data is publicly available. If JPMC makes a bulk purchase of
mortgages in the Chicago market for the purpose of improving its CRA
performance, the Bank will provide the purchased loan data to the
Coalition by race/income of borrower and income of census tract at its
next regularly scheduled meeting.
Lending Goals by Borrower Characteristic
| LMI / MUI MSR
| Black/White MSR
| Latino/White MSR
| Home Purchase
| 1.0
| 1.0
| 1.0
| Home Improvement
| 1.0
| 1.0
| 1.0
| Refinance
| 1.0
| 1.0
| 1.0
|
Lending Goals by Census Tract Type
| LMI / MUI MSR
| Minority / Non-Minority MSR
| Home Purchase
| 1.0
| 1.0
| Home Improvement
| 1.0
| 1.0
| Refinance
| 1.0
| 1.0
| Small Business
| 1.0
| 1.0 (applicable when data become available)
| Very Small Business
| 1.0
| 1.0 (applicable when data become available)
|
Community Development Lending
- JPMC
will provide an average of $80 million per year in community
development loans in the Chicago six-county area. The loans will
support affordable multifamily housing, single-family renovation and
commercial development in LMI areas. The Bank will recognize the
importance of a mix of loan size, complexity and relative community
benefit and a significant portion of this lending will be for
affordable multifamily units in LMI areas. JPMC will explore expanding
market opportunities in city and suburban communities with Coalition
members.
Subprime Lending
- Chase
Manhattan Mortgage Corporation (CMMC) is JPMC's primary legal entity
that originates, purchases, and services mortgage loans. All JPMC legal
entities that are HMDA
reporters follow the subprime best practices of Chase Manhattan
Mortgage Corporation (CMMC), the major mortgage lending subsidiary of
JPMC. JPMC will utilize the controls (see attachment) it has
established to examine and monitor the underwriting process throughout
CMMC including the level of guidance and oversight during underwriting.
- The
mortgages that JPMC originates in Illinois will conform to the Illinois
high cost loan law and the mortgages the Bank originates in New York
State will conform to the New York State high cost loan law.
- JPMC
will use the following due diligence in screening trustee loans: When
the Bank serves as a trustee for an issue of mortgage-backed
securities, it often becomes the technical "owner" or assignee of the
mortgages which secure the issue, not in its own right, but only for
the benefit of the securities holders. The Bank will not accept any
trusteeship for such securities unless the party responsible for
originating the mortgages or selling them to the mortgage pool
represents that the pool contains no loans that violate any applicable
federal or state laws (thus the representation extends to warrant the
absence of predatory loans). As trustee, the Bank has no ability to
examine each mortgage for compliance with such laws. It must depend on
others' representations. JPMC agrees to consider establishing further
safeguards to exclude predatory loans from trustee contracts.
Foreclosures
- The Bank will work with community groups with respect to preventing foreclosures.
- The
Bank will create a liaison office for FHA and other loans to help work
with consumer groups and borrowers in an attempt to provide solutions
that will help borrowers who have been the victims of fraud to remain
in their homes.
Mortgage Lending Volume
- JPMC aspires to be one of the top five overall mortgage originators in Chicago.
Mortgage Products
- The
Bank will increase its downpayment assistance program (DAP) to $200,000
dollars a year, with up to $3,000 dollars per LMI borrower.
- Once
residential loan product mapping of the two banks home loan products is
complete, JPMC will discuss with the Coalition if the Bank One home
improvement loan product will be continued. JPMC notes that the
Coalition believes this product has favorable features.
- JPMC will offer a full array of affordable mortgages with flexible underwriting criteria in all underserved markets in Chicago.
Secondary Goals
- JPMC
will continue to have a centralized third mortgage review process for
all denied LMI and minority loan applications for every market served
by CMMC, including Chicago which is covered by this program today.
- JPMC
will keep in place a strong REO workout unit with skilled and senior
people who have the resources to be flexible about rewriting loans.
- JPMC will explore the retention or creation of a loan product for people with disabilities.
ECONOMIC DEVELOPMENT AND SMALL BUSINESS LENDING
See Chart on Page 1 for Small Business Lending Market Share Ratio Goals
- JPMC
will continue to offer SBA loans, including the Community Express
program and other innovative small business lending programs.
- JPMC
will work with the Chicago CRA Coalition to establish a special purpose
loan program for the purpose of partnering with municipalities and
other entities to offer credit products for women- and minority-owned
small businesses with flexible underwriting that address the needs of
subcontractors.
- JPMC will remain involved with
lending for mixed-use properties in the Chicago market and remain
strong in commercial lending and community development lending in
general.
SERVICES
- The
Bank will establish 12 new branches in low- and moderate-income census
tracts in the Chicago region from November 2003 to December 2005.
- JPMC
will aspire to achieve a ratio of branches in lower-income communities
to upper-income communities similar to that for all banks/thrifts in
the 6-county Chicago region.
- JPMC will give due
consideration to its community responsibilities when considering
whether to continue or establish new commercial relationships with high
cost lenders and financial service providers.
- JPMC
will explore, with the Chicago CRA Coalition, the creation of a direct
deposit advance program to serve the needs of LMI households.
- JPMC will evaluate the feasibility of expanding the Alternative Banking Program to the bank's whole market.
- JPMC will attempt to retain strong, affordable checking, and savings account products.
- JPMC
acknowledges the concerns of the Chicago CRA Coalition with Bank One's
Refund Anticipation Loan Business and will assess how these concerns
might be addressed.
GRANTS AND INVESTMENTS
- JPMC
will continue to support homeownership education, foreclosure
prevention programs, financial literacy programs, affordable housing
development, small business development, and free tax preparation
through the provision of grants and investments.
- JPMC will maintain Bank One's current involvement in a variety of diverse grants and investments.
- JPMC
proposes to increase its community development grants in the Chicago
region as a percent of all its charitable giving. The two CEOs of the
Bank have committed to increase the overall level of charitable giving
in the Chicago market.
- JPMC will achieve a level of
innovative, diverse, and creative community development investments
commensurate to its presence in the Chicago region.
- JPMC
will provide a breakdown of community development grants, loans and
investments made to CDFIs in the 6-county Chicago region in 2004 that
will not identify individual customers.
- JPMC will
report its progress on meeting the Chicago portion of its plan to
provide $1 billion in loans, grants, investments and long-term,
below-market equity equivalent investments to U.S. CDFIs over ten years.
Miscellaneous
- JPMC
will meet with the Chicago CRA Coalition Steering Committee twice a
year to monitor the bank's progress in meeting the goals in the
agreement, including appropriate data and narratives. A senior vice
president will attend at least one of these meetings.
- JPMC will keep a high level of corporate decision-making in Chicago.
ATTACHMENT
JPMC Subprime Lending Controls
- In
our subprime business, JPMC focuses on the correct product selection.
JPMC has established a review process for direct subprime first
mortgage applicants sourced through loan officers. Under this process,
the following types of applications are reviewed against prime mortgage
underwriting criteria as well as against our special purpose pool [1]
guidelines: retail subprime mortgage applications that meet certain
thresholds, such as credit bureau score and loan-to-value rations, as
well as all applications received from minorities. The subprime
applications that meet, or potentially meet, prime mortgage standards
are advised and offered the opportunity to have their applications
referred to the prime channel.
- JPMC also has a Call
Center primarily for subprime first and second mortgage applicants who
respond to direct mail solicitations. First mortgage applicants that
meet certain thresholds, such as credit bureau score, loan-to-value and
debt-to-income ratios, are transferred to a prime channel for
processing.
- With respect to home equity applications
sourced through the Call Center, JPMC's computer system automatically
offers all products for which the applicant qualifies. If the applicant
qualifies for a prime loan, then the applicant will be offered the
prime loan.
- JPMC also applies a "net benefits test" to
all subprime first mortgage refinances and second mortgages. The test
ensures that all applicants for these loans receive a loan that
benefits them.
[1] A program established pursuant to Reg. B to increase lending to LMI and minority mortgage applicants |
|
|
|
|
|
|
| 29 E. Madison, Suite 1710 | Chicago, Illinois
60602-4566 | (312) 368-0310 tel | (312) 368-0316 fax |
|
|
|
|
