JP Morgan Chase 2015 Annual Report Download - page 262

Notes to consolidated financial statements
252 JPMorgan Chase & Co./2015 Annual Report
Financial effects of modifications and redefaults
The following table provides information about the financial effects of the various concessions granted in modifications of
residential real estate loans, excluding PCI, under the Firm’s loss mitigation programs and about redefaults of certain loans
modified in TDRs for the periods presented. Because the specific types and amounts of concessions offered to borrowers
frequently change between the trial modification and the permanent modification, the following table presents only the
financial effects of permanent modifications. This table also excludes Chapter 7 loans where the sole concession granted is the
discharge of debt.
Year ended
December 31,
(in millions, except
weighted-average
data and number
of loans)
Home equity Mortgages
Total residential real estate
– excluding PCISenior lien Junior lien
Prime, including
option ARMs Subprime
2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013
Weighted-average
interest rate of
loans with
interest rate
reductions –
before TDR 5.69% 6.38% 6.35% 4.93% 4.81% 5.05% 5.03% 4.82% 5.28% 6.67% 7.16% 7.33% 5.51% 5.61% 5.88%
Weighted-average
interest rate of
loans with
interest rate
reductions – after
TDR 2.70 3.03 3.23 2.17 2.00 2.14 2.55 2.69 2.77 3.15 3.37 3.52 2.64 2.78 2.92
Weighted-average
remaining
contractual term
(in years) of
loans with term
or payment
extensions –
before TDR 17 17 19 18 19 20 25 25 25 24 24 24 22 23 23
Weighted-average
remaining
contractual term
(in years) of
loans with term
or payment
extensions – after
TDR 32 30 31 36 35 34 37 37 37 36 36 35 36 36 36
Charge-offs
recognized upon
permanent
modification $1 $2 $7 $3$25 $70 $9$9$16 $2$3$5 $15 $39 $98
Principal deferred 13 57 14 11 24 41 39 129 17 19 43 85 74 203
Principal forgiven 214 30 421 51 34 83 206 32 89 218 72 207 505
Balance of loans
that redefaulted
within one year of
permanent
modification(a) $14 $19 $26 $7$10 $20 $75 $ 121 $ 164 $58 $ 93 $ 106 $ 154 $ 243 $ 316
(a) Represents loans permanently modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within
one year of the modification. The dollar amounts presented represent the balance of such loans at the end of the reporting period in which such loans defaulted. For
residential real estate loans modified in TDRs, payment default is deemed to occur when the loan becomes two contractual payments past due. In the event that a
modified loan redefaults, it is probable that the loan will ultimately be liquidated through foreclosure or another similar type of liquidation transaction. Redefaults of
loans modified within the last 12 months may not be representative of ultimate redefault levels.
At December 31, 2015, the weighted-average estimated
remaining lives of residential real estate loans, excluding
PCI loans, permanently modified in TDRs were 10 years for
senior lien home equity, 9 years for junior lien home equity,
10 years for prime mortgages, including option ARMs, and
8 years for subprime mortgage. The estimated remaining
lives of these loans reflect estimated prepayments, both
voluntary and involuntary (i.e., foreclosures and other
forced liquidations).
Active and suspended foreclosure
At December 31, 2015 and 2014, the Firm had non-PCI
residential real estate loans, excluding those insured by U.S.
government agencies, with a carrying value of $1.2 billion
and $1.5 billion, respectively, that were not included in
REO, but were in the process of active or suspended
foreclosure.