Finally, it looks as though the mortgage banks are on the run. At least that's how it looks in the news reports. It's another matter entirely when it comes to actual help for distressed homeowners, but at least the big banks are showing signs that they know they are in trouble over years of offering subprime mortgages and then bungling their attempts to bluff their way through the foreclosure process with shoddy and even fictitious paperwork.

Last week it was Bank of America announcing that it would really, really change the way it handled mortgages in default. Of course, as we explained in our blog post on the subject, some of BofA's changes may be bad news for many Fort Lauderdale homeowners. This week, it is JPMorgan Chase & Co that is claiming it is going to truly change its ways when it comes to distressed mortgage loans.

In a sign of a changing attitude toward distressed homeowners, JPMorgan Chase is changing the name of its "Loss Mitigation" department to the "Borrower Assistance" department.

The bank estimates that it lost $7 billion just last year because of its shoddy and abusive foreclosure practices. Even for a bank as big as JPMorgan, a loss that size gets executives' attention.

A new executive in charge of distressed mortgage accounts recently told Reuters that the bank would shift the Borrower Assistance department much more aggressively toward mortgage modifications.

"Modifying a loan is much more economical for the firm than foreclosing," the executive is reported to have said in a message to bank employees.

Fort Lauderdale foreclosure defense attorneys only wish the banks had gained that insight sooner, for the sake of the foreclosed homeowners.

Source: Chicago Tribune "JPMorgan Chase overhauls troubled mortgage unit" 7/18/2011