CHASE WANTS TO SHARE THIS KEY LESSON TO HELP YOU DISCOVER, ESTABLISH AND PRESERVE A LEGACY FOR YOU AND YOUR FAMILY.

Doing the Responsible Thing

With the U.S. housing market in turmoil, Chase has launched a new campaign to get the word out about responsible lending. As the exclusive lender for the Union Plus® Mortgage Program, Chase brings its stability, strength and dependability to union members.

For the home lending industry in the United States, 2007 has been a rough year. Many homeowners, especially those with adjustable-rate mortgages, are struggling to make payments.

Delinquencies in the subprime market have generated concerns inside and outside the financial community. “No matter what company you work for, if you say you work in home lending, your family and friends are going to ask, ‘What’s going on?’ ” said Thasunda Duckett, Senior Executive for Affordable Lending at Chase.

It’s in this atmosphere that Home Lending recently launched the Responsible Lending Campaign. The effort combines messages and resources for both customers and employees about what Chase stands for, Duckett said. “There are a couple of things we wanted to do,” she said. “We wanted to communicate to employees that they work for a reputable company. And we wanted to remind customers, our real estate partners, builders and others that they are partnering with a company and a brand they can trust.”

Doing The Right Thing

Dave Lowman, CEO of Home Lending at Chase, said one of the most important goals of the campaign is to let customers know that Chase is not only interested in helping them purchase a home, but also in helping them keep it. “If you look at what’s going on in the industry today, there are lenders who are focused on achieving – but not helping sustain – homeownership,” Lowman said. “Chase wants to do both.”

“It’s about being responsible, being good corporate citizens and making sure that we treat people fairly and do the right thing,” Lowman said. “The goal of the Responsible Lending Campaign is to get that message out so that customers develop an ongoing, trusting relationship with the bank that allows Chase to address a problem before it’s too late.”

“One of the biggest problems is that these borrowers that are in trouble are not reaching out to their lenders,” he said. “And they’re not reaching out to us because they’re scared of us. They think we want to take their house,” he said. “Really, that’s the last thing we want to do.”

Though the campaign addresses many of the core issues surrounding the housing crisis, work on it actually began before the industry started to see problems. Lowman said problems in the industry only helped to move the effort along a little faster. The goal was to show employees and consumers how Chase stands out among the competition.

“We want to reinforce to people that we represent strength and commitment,” Lowman said. “We’ve been here for 200 years and we’ll be here when you need us. We’re Chase. We should make sure people know what we stand for.”

Guiding Principles

The Responsible Lending Campaign is built around four guiding principles. The first principle, “We believe an informed consumer is our best customer,” speaks to the importance of customer education,” Duckett said. The Home Lending sales force will receive customer communication, tools and resources designed to increase customer knowledge about home lending concepts.

One of the ways Home Lending is putting this principle into action is the creation of a mortgage “nutrition label,” similar in concept to the food industry’s nutrition label. The label defines mortgage terms for consumers so they can more easily understand the conditions of their mortgage before they sign.

Michael Dubois of The National Affordable Lending group at Chase said the “nutrition label” is another way for Chase to educate consumers. “The mortgage process can be cumbersome and detailed,” he said.

“The disclosure statement is a way to simplify the process for the consumer with the information in an easy-to-follow format.” Dubois said this document is being given to every consumer applying for a mortgage. “When a loan officer pre-qualifies a consumer, we want – at that point – to have them provide this nontraditional disclosure statement to help customers understand what they qualify for,” he said.
“Hopefully, they will view Chase as a company that is easy to do business with.” The company also has taken other steps to educate consumers. In the last 18 months, Home Lending held more than 550 educational seminars and distributed a Homeowner Education CD-ROM. The Chase Homeownership Preservation Office has facilitated more than 45 foreclosure prevention training sessions for nonprofit counselors, housing advocates and public offices, training more than 1,500 participants.

Maintaining A Relationship

The Responsible Lending Campaign’s second principle, “We are committed to creating customers for life,” speaks to the firm’s desire to maintain an ongoing – and profitable – relationship with customers.

Duckett said the way to achieve that goal is to develop relationships built on trust and regular communication. One way Home Lending is doing this is through the introduction of an “annual check-up” program that helps consumers review their finances and their mortgages to make sure their current mortgages continue to be right for them. “One of the issues with foreclosures on the servicing side is that we can’t get customers to call us back because they just think that Chase wants more money,” Duckett said.

“If we had an annual process, though, they might say, ‘I’m concerned, what are my options?’ So if and when there’s a problem, we’ll have better pull-through,” she said. “We think it will help develop that relationship of Chase as a trusted advisor.”

Avoiding the Wrong Path

The third principle, “We want to help consumers achieve and sustain homeownership,” most closely addresses the current home lending crisis. Dubois said Home Lending wants to keep customers from falling behind on their payments and possibly losing their homes.

To do this, Chase is contacting customers whose adjustable-rate mortgages are resetting and therefore going to a higher payment – to ensure customers are prepared for the change. If not, Home Lending can work with them, possibly offering an alternative mortgage product. “Homeowners who have problems also will be able to call a special phone number that will direct them to services that can help them meet their obligations,” Dubois said.

“We’re going to try to help them before their problems take them down a path that we want them to avoid,” Dubois said.


‘Best-Kept Secret'

The last principle, “We recognize that homeownership contributes to thriving communities,” takes a larger view of the home lending business. Lesley Corydon, who works in Home Lendings Mortgage Marketing group, said that Chase wants to show its commitment to the many communities it serves.

“We want to reaffirm our principles of solid, strong, responsible lending to our employees and our client base and remind people what we stand for, now more than ever,” Corydon said.

Union Plus® is a registered trademark of Union Privilege. © 2007 JPMorgan Chase & Co. All Rights Reserved.

FOUR PRINCIPLES

1. We believe an informed consumer is our best customer.

2. We are committed to creating customers for life.

3. We want to help consumers achieve and sustain homeownership.

4. We recognize that homeownership contributes to thriving communities.
   

The Legacy of Homeownership Tour presented by Chase
The Tour offers free, informational workshops, one-on-one consultations with mortgage experts and access to industry experts.

Chicago - May 3rd
The University of Illinois

Houston - May 31st
Reliant Park

New York - June 14th
One Chase Manhattan Plaza

Washington, D. C. - July 12th
Location TBD

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www.chase.com/legacy