A week after JP Morgan Chase admitted to Congress that it broke the law at least 4,500 times by foreclosing on active-duty soldiers and charging members of the military high interest rates and fees, the bank announced Wednesday that it will create a new mortgage program to protect soldiers from abusive practices.
Beginning in April, Chase will reduce the maximum interest rate it charges active-duty personnel to 4%, according to a bank press release. That’s lower than the maximum of 6% allowed under the Servicemembers Civil Relief Act.
[Related article: Chase Broke Law in Soldiers’ Foreclosures]
Chase also will improve its mortgage modification program for active-duty soldiers who are behind on their payments. People with second mortgages also owned by Chase will get the interest rates on their second mortgage cut to 1%.
“This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration on that track record,” Jamie Diamond, CEO of Chase, said in the press release. “We deeply apologize to our military customers and their families for these mistakes.”
The bank also will give away 1,000 homes to active-duty personnel and veterans over the next five years, and will open five homeownership counseling centers in cities with large military bases, including Killeen, Texas and Norfolk, Virginia.
[Related: Three Ways to Fight Military Identity Theft]
Image: j. botter, via Flickr.com