Few Homeowners See Benefit From National Mortgage Settlement, Three Months Later

If 76-year-old Gloria Schrager lives to be 100, she will get the worst birthday present ever: a bill from JPMorgan Chase for $199,052.

Schrager was behind on her mortgage payments and in danger of losing her Orlando home to foreclosure when she accepted a modification plan from Chase that made her monthly payments much more affordable. But the Peruvian immigrant feels like the house she has lived in since 1985 isn’t really hers anymore. Rather than forgiving a portion of her debt as she requested, Chase modified her loan so that most of her principal would be due in one gigantic balloon payment at the end of the loan’s term.

“It is a painful thing at the very end to have balloon payment,” said Schrager, who lives on her Social Security checks and by working part time for $9 an hour at a medical clinic for children with autism and Down syndrome. “It’s like I am paying rent on this house, but if something breaks, I cannot call the landlord. I am so scared that I am going to get sick and not be able to keep up” with the payments.

As part of the national mortgage settlement signed in March, five large banks — Chase, Bank of America, Citigroup, Wells Fargo and Ally Financial — agreed to offer at least $10 billion in loan forgiveness, or principal reduction, to some of the estimated 11.1 million homeowners who owe more on their mortgage than their home is worth.

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