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• Is JPMorgan Chase financially strong and well capitalized?
Yes. JPMorgan Chase has remained financially strong even during these difficult economic times. Our bank has maintained strong capital ratios that exceed our regulatory requirements, allowing us to weather this current crisis and to be prepared in the event of future stress. We are committed to maintaining a "Fortress Balance Sheet" so that we are in a position to withstand an even more severe downturn. We believe that is what a responsible bank should do. And at JPMorgan Chase that is the philosophy that we are adhering to.
• Did JPMorgan Chase pass the government "stress test?"
The results of the Treasury Department's unprecedented review of the financial stability of the nation's 19 largest banks should provide reassurance to all stakeholders as to the ability of the U.S. banking system to withstand the economic downturn. The "stress test" results also validate the fact that the federal govenment's actions over the past year to strengthen the financial system are working. The "stress test" results were very positive for our company, determining that JPMorgan Chase's capital position would remain strong under far more highly stressed conditions than exist today, and that there is no need for the company to raise additional capital at this time. Our existing strong capital base and loan-loss reserves, together with our significant pretax, pre-provision earnings power, will enable us to weather the adverse conditions envisioned by the test, while still maintaining very strong capital ratios, even when excluding TARP preferred stock. JPMorgan Chase has worked hard to maintain its Fortress Balance Sheet and strong capital position in this challenging environment. Importantly, JPMorgan Chase believes that it could handle a substantially worse environment than the government's adverse conditions, even though JPMorgan Chase is not expecting such a scenario. We are committed to supporting healthy economic growth and to doing our part to help our country through these tough times. In particular, we remain committed to safe and sound lending and to being a responsible corporate citizen. In the first quarter of this year alone, JPMorgan Chase lent more than $150 billion to consumers, small businesses, non-profits, municipalities, corporations and others.
• How is JPMorgan Chase positioned compared to the rest of the banking industry?
Among major banks, we are proud of the fact that observers regard JPMorgan Chase as being one of the strongest and most stable of our industry peers. This is a reflection of our philosophy of maintaining a "Fortress Balance Sheet".
• Why did JPMorgan Chase participate in the TARP program?
The U.S. government asked JPMorgan Chase to participate in the TARP program because it was the right thing for the American financial system- not because our bank had any need for capital to maintain solvency. JPMorgan Chase's balance sheet has always been strong, even during these difficult economic times. The decision to participate in TARP was based on our commitment to working with the Treasury Department to support the entire banking system and the economy as whole. Toward that end, it was seen as critical that all major banks participate in TARP in order to inject additional liquidity into the credit markets and to ensure that no bank would reject TARP funds out of fear of a stigma that might cause investors to lose confidence in that bank.
• Has JPMC repaid all of the TARP funding that it accepted?
On June 17th, JPMorgan Chase repaid in full the $25 billion preferred stock investment we accepted under the Troubled Asset Relief Program (TARP). It is a testament to our firm's strength and stability that JPMorgan Chase was able to repay American taxpayers, and to be included in the first group of institutions granted permission to repay TARP.
• With JPMC's repayment of TARP, what happens now?
There is still a great deal of work ahead for our bank, for the financial industry, and for our country. The repayment of TARP only heightens the sense of responsibility that we all share. JPMorgan Chase remains committed to safe and sound lending; serving our clients and shareholders; helping consumers through mortgage modifications and other programs; supporting charitable giving and community involvement; and managing our company and its assets in a responsible way. Going forward, JPMorgan Chase plans to build on these efforts - continuing to provide credit and liquidity to consumers, companies, communities and non-profits around the world, while maintaining its responsible business practices. It is precisely this longstanding dedication to responsible banking that put us in position to repay TARP in full. And this same commitment is going to continue to guide us as we seek to do our part to build a stronger financial system.
• Is JPMorgan Chase still lending?
Yes. In fact, we never stopped lending. JPMorgan Chase has maintained
a strong balance sheet even during these difficult economic times, which
has allowed us to continue providing credit to consumers and businesses
without interruption. JPMorgan Chase has provided $150 billion in new
credit to an estimated 4.5 million consumers through credit cards, mortgages,
auto and student loans, and to small and mid-sized businesses and large
corporations.
• Is Chase participating in the President's new mortgage plan?
Yes, in addition to Chase's own homeownership programs, we support the President's efforts and have been an industry leader in implementing all aspects of the Making Home Affordable plan.
There two aspects of the plan; refinance and mortgage modification. Refinance helps borrowers who are current on their monthly mortgage but don't qualify for a standard refinance because they owe 80% to 105% of their home's value or have an adjustable rate mortgage (ARM).
Mortgage modification helps borrowers who are behind on their payments or at risk of falling behind. The modification process seeks to lower the monthly payment through several options including reducing the interest rate, extending the loan term or providing principal forbearance.
Through our own initiatives and by participating in the Obama administration programs, Chase expects to help a total of more than 650,000 families by modifying more than $110 billion of home loans.
• What if I am current on my mortgage? What sort of modification am I eligible for?
Chase offers several mortgage modification options for those struggling to make their monthly mortgage payment including reducing the interest rate, extending the loan term, a repayment plan or principal forbearance. Homeowners must demonstrate a financial need in the form of a hardship letter describing the current situation and what led to the current situation.
For those homeowners who may not qualify for a modification or were previously unable to refinance due to a drop in home values, the recently announced Making Home Affordable refinance plan may provide a viable option.
The best way to determine if you are eligible for refinancing or a modification is to call your mortgage servicer. Don't wait to call.
• What is JPMorgan Chase doing to prevent banking sector mistakes from happening again?
JPMorgan Chase's first and most important contribution to the long-term stability of the banking system is to make sure that we are operating our bank according to the highest standards for soundness. Our Fortress Balance Sheet is at the heart of our commitment to ensuring we are there for our customers in good times and bad. Looking ahead, JPMorgan Chase is committed to working with lawmakers and regulators to establish an improved regulatory structure that meets the needs of a capital system that is global, interconnected, complex and highly dynamic.
• Does JPMorgan Chase see an additional role for the Federal government in preventing risks to the financial system?
At JPMorgan Chase, we believe that the question is not whether we need more regulation or less regulation. It is about having regulation that is more coordinated and consistent in its approach. We are working with lawmakers and regulators to ensure that regulatory reform creates structures that reflect the new realities of the financial markets, including the fact that today our markets are global, interconnected, complex and highly dynamic. Toward that end, ideas like the establishment of a single systemic risk regulator are the kind of innovative solutions that are required.
• Why should people who borrowed more than they can afford deserve help - either from the Federal government or JPMorgan Chase?
There is no question that over the past several years, too many financial institutions provided credit without doing sufficient due diligence on the credit-worthiness of borrowers, and too many borrowers took on more debt than they could afford. The goal now must be two-fold: first, to do what it takes to restore economic stability and growth; second, to make sure we have learned the lessons of the past so that mistakes are not repeated. At JPMorgan Chase we are proud of the work we have been doing since last year to help mortgage holders stay in their homes. These efforts are not about rewarding irresponsibility. Rather, it is about recognizing the fact that all of us are better off when families can stay in their homes and foreclosures can be prevented. Doing so helps shore-up the housing market, which in turn benefits the entire economy.
•In these tough times, how does JPMorgan Chase approach executive compensation?
At JPMorgan Chase, we believe we have been at the forefront of sensible compensation practices. Our process is disciplined and rigorous, and we have always sought to reward the long-term performance of our employees. We work hard to hire, train and retain the best talent - smart, ethical, hard-working, entrepreneurial individuals - and getting compensation right is a critical part of this process. We pay our employees for performing well and for helping to build a company with long-term, sustainable performance. Performance to us has never been simply a financial measure. It has always included the broader contribution a person brings to a company, such as maintaining integrity and compliance; recruiting and training a diverse, outstanding workforce; and building better systems and innovation. It is with these principles in mind that we reward the performance of our employees.
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• Is JPMorgan Chase still lending?
Yes. In fact, we never stopped lending. JPMorgan Chase has maintained a strong balance sheet even during this tough economy, which has allowed us to continue providing credit to consumers and businesses without interruption. During the first quarter of 2009, JPMorgan Chase has provided $150 billion in new credit to an estimated 4.5 million consumers (through credit cards, mortgages, auto and student loans), and to small and mid-sized businesses and large corporations.
• Is it harder to qualify for a JPMorgan Chase loan?
JPMorgan Chase has always been committed to lending responsibly. Before we provide a loan to a consumer or business we want to ensure that the borrower will be able to pay it back in a timely fashion. This is prudent lending. For qualified consumer and business borrowers, getting a loan from JPMorgan Chase remains as possible as ever.
• Did JPMorgan Chase pass the government "stress test?"
The results of the Treasury Department's unprecedented review of the financial stability of the nation's 19 largest banks should provide reassurance to all stakeholders as to the ability of the U.S. banking system to withstand the economic downturn. The "stress test" results also validate the fact that the federal govenment's actions over the past year to strengthen the financial system are working. The "stress test" results were very positive for our company, determining that JPMorgan Chase's capital position would remain strong under far more highly stressed conditions than exist today, and that there is no need for the company to raise additional capital at this time. Our existing strong capital base and loan-loss reserves, together with our significant pretax, pre-provision earnings power, will enable us to weather the adverse conditions envisioned by the test, while still maintaining very strong capital ratios, even when excluding TARP preferred stock. JPMorgan Chase has worked hard to maintain its Fortress Balance Sheet and strong capital position in this challenging environment. Importantly, JPMorgan Chase believes that it could handle a substantially worse environment than the government's adverse conditions, even though JPMorgan Chase is not expecting such a scenario. We are committed to supporting healthy economic growth and to doing our part to help our country through these tough times. In particular, we remain committed to safe and sound lending and to being a responsible corporate citizen. In the first quarter of this year alone, JPMorgan Chase lent more than $150 billion to consumers, small businesses, non-profits, municipalities, corporations and others.
• What is JPMorgan Chase doing to help people struggling with their mortgages?
At JPMorgan Chase, we understand that these difficult economic times have created challenges for homeowners. We also know that our entire economy is best served when more homeowners can stay in their homes, rather than face foreclosure. That is why since last year we have had in place a program for borrowers whose mortgages are serviced by JPMorgan Chase that helps reduce payments to an affordable level. That is also why we have established 24 Homeowner Centers in cities across the country where mortgage holders can come and receive hands-on help from experts (click here for information on a Homeowner Center in your community). The centers are part of a larger program in which we have lowered payments for well over 80% of the mortgages we modified for borrowers who were behind on Chase-owned loans in the last few months. In the first quarter of 2009, JPMorgan Chase. continued to make progress on its Foreclosure Prevention program, preventing an additional 70,000 foreclosures. This brought total foreclosures prevented to 150,000 since announcement of the program in October 2008.
Since early 2007, Chase has helped prevent 330,000 foreclosures, primarily by modifying loan terms. Through our own initiatives and by participating in the Obama administration programs, Chase expects to help a total of more than 650,000 families by modifying more than $110 billion of home loans.
• What is JPMorgan Chase doing to help people struggling with their credit card bills?
At JPMorgan Chase, we recognize that during an economic downturn even responsible borrowers may find themselves struggling with credit payments. Our goal is to ensure that we are working with our customers to put in place solutions that allow them to pay off their bills as quickly as possible and in a manner that protects their financial situation. That is why we have expanded our use of flexible payment programs to help those customers experiencing financial distress: In 2008, we saw 600,000 new enrollments in flexible payment programs, and we anticipate and are prepared for that number to increase.
• Why did JPMorgan Chase participate in the TARP program?
The U.S. government asked JPMorgan Chase to participate in the TARP program because it was the right thing for the American financial system- not because our bank had any need for capital to maintain solvency. JPMorgan Chase's balance sheet has always been strong, even during these difficult economic times. The decision to participate in TARP was based on our commitment to working with the Treasury Department to support the entire banking system and the economy as whole. Toward that end, it was seen as critical that all major banks participate in TARP in order to inject additional liquidity into the credit markets and to ensure that no bank would reject TARP funds out of fear of a stigma that might cause investors to lose confidence in that bank.
• Has JPMC repaid all of the TARP funding that it accepted?
On June 17th, JPMorgan Chase repaid in full the $25 billion preferred stock investment we accepted under the Troubled Asset Relief Program (TARP). It is a testament to our firm's strength and stability that JPMorgan Chase was able to repay American taxpayers, and to be included in the first group of institutions granted permission to repay TARP.
• With JPMC's repayment of TARP, what happens now?
There is still a great deal of work ahead for our bank, for the financial industry, and for our country. The repayment of TARP only heightens the sense of responsibility that we all share. JPMorgan Chase remains committed to safe and sound lending; serving our clients and shareholders; helping consumers through mortgage modifications and other programs; supporting charitable giving and community involvement; and managing our company and its assets in a responsible way. Going forward, JPMorgan Chase plans to build on these efforts - continuing to provide credit and liquidity to consumers, companies, communities and non-profits around the world, while maintaining its responsible business practices. It is precisely this longstanding dedication to responsible banking that put us in position to repay TARP in full. And this same commitment is going to continue to guide us as we seek to do our part to build a stronger financial system.
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• I am current on my mortgage. What sort of modification am I eligible for?
Chase offers several mortgage modification options for those struggling to make their monthly mortgage payment including reducing the interest rate, extending the loan term, a repayment plan or principal forbearance. Homeowners must demonstrate a financial need in the form of a hardship letter describing the current situation and what led to the current situation.
For those homeowners who may not qualify for a modification or were previously unable to refinance due to a drop in home values, the recently announced Making Home Affordable refinance plan may provide a viable option.
The best way to determine if you are eligible for refinancing or a modification is to call your mortgage servicer. Don't wait to call.
• I have seen ads for people who can help me modify my mortgage and avoid foreclosure. Are these offers legitimate and can they help me?
Homeowners should never pay anyone for any type of mortgage modification service. Chase, WaMu or EMC customers who are struggling to make their monthly payments can visit our 24 regional homeownership centers or call 1-866-550-5705 for mortgage information and assistance free of charge.
Some borrowers may feel more comfortable working with a certified HUD counselor or nonprofit agency whose services are available at no cost.
• My spouse lost his/her job and we are unable to pay our mortgage. Can you help?
Chase wants to ensure that customers are able to sustain homeownership
for the long-term. If you or your spouse is temporarily unemployed, you
may qualify for a special plan.
If you are underemployed, working fewer hours or have had your pay reduced, we may be able to modify your loan to a level that is affordable, depending on you new monthly income. Once again, the goal is to ensure that homeowners can sustain the new mortgage payment for the long-term and avoid defaulting later down the road.
• Is Chase participating in the President's new plan?
Yes, Chase supports the President's efforts and has been an industry leader, implementing the Making Home Affordable plan as quickly as possible.
There are currently 2 aspects of the plan, refinance and mortgage modification. Refinance helps borrowers who are current on their monthly mortgage but don't qualify for a standard refinance because they owe 80% to 105% of their home's value or who have an adjustable rate mortgage (ARM).
Mortgage modification helps borrowers who are behind on their payments or at risk of falling behind. The modification process seeks to lower the monthly payment through several options including reducing the interest rate, extending the loan term or providing principal forbearance.
Through our own initiatives and by participating in the Obama administration's programs, Chase expects to help a total of more than 650,000 families by modifying more than $110 billion of home loans.
• What if I don't qualify for any part of the President's plan - are there other options for me?
Yes, there may be options but the most important thing to do is contact your lender or mortgage servicer as soon as possible. Don't wait until you have missed a mortgage payment and find yourself in financial straits. Communication is key!
• I think my loan was sold to investors. If so, do I still qualify for help?
Yes, Chase services lots of loans on behalf of investors and is providing those borrowers with the same mortgage modification options we offer those whose loans are owned by Chase. If you have missed a mortgage payment or think you may, contact your mortgage servicer as soon as possible.
• What if I want to turn my home over to the bank?
If you can no longer afford to make your monthly mortgage payment and your current financial situation does not allow you to remain in your home, there are ways you can settle your debt.
Chase has a dedicated team in place to handle these loss mitigation situations and help homeowners navigate what can be a difficult process.
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• What is "tax equity"?
Tax equity is a structured equity investment (made at commercial operation) in U.S. renewable energy projects to help project developers/ sponsors monetize or finance the various federal tax benefits including Productions Tax Credit ("PTCs"), Investment Tax Credits ("ITC") and accelerated depreciation.
• How long does it take to close a typical wind project tax equity transaction?
From the time J.P. Morgan signs a letter of intent we can usually complete the necessary documentation and due diligence for a tax equity financing in 30 to 90 days depending on the developers'/sponsors' experience in executing structured financings, the completeness of their project level due diligence information and their resources to execute an efficient close.
• Does J.P. Morgan provide renewable energy project construction financing as well?
No. We only provide tax equity financing, with funding upon the project reaching commercial operation.
• Does J.P. Morgan provide debt for renewable energy projects in addition to tax equity?
At this time we are only making tax equity investments.
• What types of projects or assets does J.P. Morgan finance?
J.P. Morgan will finance various types of renewable power projects including wind, solar, geothermal, and biomass. To date we have had the most success in the wind market, but we have also financed solar and are actively seeking to finance geothermal.
• What are the key project attributes that J.P. Morgan evaluates in making its investment decision?
In order to raise institutional tax equity a project needs to have 1) a proven renewable energy resource (wind, solar, geothermal) or fuel supply contract (biomass), 2) commercially proven technology, 3) an investment grade off-take contract or other price support covering the base financing term and 4) an experienced/financially stable project sponsor capable of making a meaningful investment in the project.
• Do you target your investments in certain geographical areas?
Since our focus and added value is financing assets which generate federal tax benefits our focus is on U.S. renewable energy projects. J.P. Morgan has closed transactions in 17 states across the U.S. from Maine to Hawaii and from North Dakota to Texas.
•Given the general banking and financial crisis, which caused a number of institutional tax equity investors to leave the market, is J.P. Morgan still pursuing new tax equity investments in renewable energy projects?
J.P. Morgan is still actively pursuing new tax equity investments in renewable energy assets.
• How did the American Recovery and Reinvestment Act (the "ARRA") change the renewable energy project financing market?
The ARRA provided renewable energy projects with a variety of new incentives to encourage further growth in the business and help overcome some of the financing issues created by the banking and financial crisis. Arguably the biggest change allows projects the option of electing a 30% ITC based on qualified cost in lieu of the 10 year stream of PTCs through 2010. In addition, projects have the option to convert the 30% ITC into a 30% cash grant from the U.S. government payable within 60 days of submitting the application. Thus projects with high costs and low capacity factors would be expected to elect the 30% ITC/grant option while lower cost projects with high capacity factors would be expected to choose the PTC option. J.P. Morgan has established tax equity partnership flip structures to finance renewable energy projects under either scenario.
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