Chase’s full-page WSJ ad vs the truth
Chase plastered a page of the Wall Street Journal with a full-page ad today touting its success in providing loan modifications. The true story however is far from the limited picture the full-page ad provides.
In the ad, Chase touts its opening of 51 home ownership centers and the fact that they have “offered” 750,000 loan modifications to homeowners.
The reality is quite a bit less flattering than the ad. Of those 750,000 modifications Chase has offered, how many of them were so ridiculously ineffective that the homeowner could only decline, like one that offered a sum total of 22 cents in reduced monthly mortgage payment? Of those that were accepted, how many of them were made permanent, a much better measure of the effectiveness of their program. As of May, Chase had made about 47,000 loan modifications permanent, which amounts to about 6% of the total they have “offered.”
What about the success of the permanent modifications? According to a Bloomberg article, about half of all permanent modifications make their way to default again.
So what is the bottom line? Of the 750,000 loan modifications Chase claims to have “offered”, about 3% of them will end up being effective. Not much to brag about really. As to those home ownership centers, how useful can they be if they aren’t helping people stay in their homes?
Advertising | admin August 3, 2010
