Chase Agrees to Modify Problem Loans.(Chase Manhattan Mortgage Corp.)(Brief Article)(Company Profile)

Chase Manhattan Mortgage Corp., named in a suit last year for purchasing mortgages of homes with allegedly inflated appraisal values, is beginning a loan modification program for approximately 250 to 300 of its borrowers in the Poconos.

"We are not requiring a release from the borrowers on any of the purported claims being asserted in the lawsuit. The intention is to keep people in their homes," said Charlotte Gilbert-Biro, vice president of corporate communications at J.P. Morgan Chase.

The pending Pocono complaint primarily centers around Gene Percudani, the owner of several mortgage-related and builder companies. Those named in the complaint are Chapel Creek Mortgage Bankers Inc., Mount Pocono, Pa., Chapel Creek Homes Inc., Tannersville, Pa., and Raintree Homes Inc., Tannersville, Pa.

The Pocono complaint alleges that Mr. Percudani's companies attracted "customers to purchase and finance newly constructed houses in or around Tobyhanna, Pa. at prices well in excess of the houses' actual fair market value, thereby realizing inflated profits from the sale and financing of each transaction."

In Chase's newly announced modification program, borrowers affected at the high-end may see their mortgages reduced by as much as $50,000. "Some people might benefit from an interest rate reduction and others from the reduction in principle," said Ms. Gilbert-Biro.

"The people who received letters from us about the modifications are borrowers who came to Chase through Chapel Creek Mortgage from Jan. 1, 1995 to 2000," she added.

In the most recent legal development in the case, Pennsylvania Attorney General Mike Fisher, last month, filed a civil suit against Mr. Percudani, his entities and related parties, making similar ...