The following article is brought to you by Alistair Barr at MarketWatch.
SAN FRANCISCO (MarketWatch) — J.P. Morgan Chase & Co. Chief Executive Jamie Dimon said Friday that the foreclosure process is a “mess” that’s cost the financial-services giant a lot of money.
Dimon also said litigation over troubled mortgage securities is “going to be a long, ugly mess,” but won’t be “life-threatening” for J.P. Morgan.
J.P. Morgan reported better-than-expected fourth-quarter profit on Friday, partly helped by lower loan-loss provisions as nonperforming assets decline.
However, the lingering effects of the housing bust are still rippling through the banking sector.
Last year, a controversy erupted over so-called robo-signers, who are employees of mortgage lenders or servicers who sign affidavits supporting foreclosures that have to be cleared by judges in many states.
With so many foreclosures to process, there’s concern that such affidavits are signed without verifying whether loan documents and other records have the correct information. The integrity of the process is a key component in how judges in some states decide that people’s houses can be taken and given back to the bank.
The controversy led to big banks halting foreclosures for several months. This has slowed down efforts to deal with the mountain of trouble mortgages that are still out there. It’s also sparked concern that banks will have to spend more money getting distressed properties through the foreclosure process.
“It is a big mess, it has cost us a lot of money,” Dimon said Friday during a conference call with analysts. “Unfortunately, the only way to do it right is name by name by name.”
“We will do as many as we can. There is a lot of paperwork. The paperwork is different in every single state,” Dimon added, according to a transcript of the call.
“There were multiple checks and balances and there may be mistakes made in the foreclosure process, but they are very few and boy, when we find them, we try to make up for them right away,” the CEO said.
Like other big banks, J.P. Morgan is also dealing with so-called mortgage putbacks. These happen when investors in mortgage-backed securities demand that originators buy back faulty loans at their original value.
This can leave banks with heavy losses. Bank of America Corp. has been hit particularly hard by the trend.
J.P. Morgan has set aside litigation reserves to cover the cost of putback disputes, Dimon noted on Friday.
“It is going to be years before this plays out,” the CEO warned. “And this litigation is going to be fought almost securitization by securitization. There is almost no other way to do it.”
“It is going to be a long, ugly mess,” he added. “The important thing is it is not going to be life-threatening to J.P. Morgan.”
Since Jamie Dimon says the opposite of the truth, I’m assuming that this will be life-threatening to J.P. Morgan. This is a “MESS” Mr. Dimon that the Big Banks created, in their greed to take from their fellow man, be it the taxpayer, the investor, or the homeowner.
Don’t confuse yourself Mr. Dimon there were LOTS of mistakes done by your bank, it hasn’t cost your bank lots of money Mr. Dimon, it has cost the taxpayers lots of money. The Big Banks refuse to do what is right, and only do what is right once they are caught.
Mr. Dimon if you have any aspirations towards a political field or a public future, you need to man up, and make right what your bank has done to its fellow man and quit lying like you made a few foreclosure mistakes. Your bank and many other banks made thousands of promises to families to get them into bad loans, i.e. predatory loans, with absolutely no regard to making right the promises made to families. You have lied and stolen from families, even using government modifications that are suppose to help families to hold families loans ransom before ultimately attempting foreclosure on them. The bottom line is banks make more money foreclosing on families and collecting the insurance then doing what is right.
Mr. Dimon, again, you have created your own ‘MESS’, so man up and do what is right, and quit stealing from your fellowman!
I’m still waiting . . .