Ousted leader at Chase
After billions in losses on bad loans along with recent reports of misdeeds (and alleged illegal activity) at JPMorgan Chase’s mortgage division, it is reported that the bank has pushed out head of home lending David Lowman.
Lowman was already sidelined in February to report to top aide and Chief Administrative Officer Frank Bisignano who was sent to the retail banking division to “fix” its floundering mortgage business. Lowman had been at Chase for five years after his tenure at Citigroup.
“Dave Lowman and I have decided he will leave the firm,” Bisignano said in a memo sent to bank staff this week. “He worked here during extraordinary times and has said he will take some much needed time off.”
Chase transgressions at the heart of the matter
At the heart of the matter is the transgressions of Chase bank with egregious examples like the military homeowner who was illegally charged a higher interest rate and fees on balances that didn’t exist, violating the 70 year old Servicemembers’ Civil Relief Act.
“Frankly, violations of the SCRA are not the only atrocious violation by the banks, there are numerous wrongful foreclosures homeowners have gone through from banks foreclosing on the wrong address to simple misreporting of credit. The lawsuits are not over and although in this case was a settlement, others have been awarded by a judge. It will be interesting to watch as the banks are brought to task over their misdeeds.”
Chase’s recent history has gotten them to this point
Recently, when the Office of the Comptroller of Currency broke with all 50 states attorneys general and dozens of federal agencies who were nearing a combined effort to investigate and penalize banks like Chase for their transgressions, we wrote, “This seems to be a 9/11 moment when several divisions of the government did not work in a coordinated effort and there was a sticky web of reasons that one body (Homeland Security) was born. Is the lending industry headed toward a singular regulatory body of its own? Who is in charge here? No one knows, because the OCC Office of Obscurity can wipe out what all other states and regulators have worked toward with a single pass deflection and lose the game for the entire nation. Lending will remain THE biggest obstacle to the housing market, but this “piddle contest” as Professor Plath at UNC put it, comes a close second.”
As the OCC broke, they made agreements with eight banks including Chase. We noted, “The OCC Executive Director, John Walsh said, ‘Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward.’”
Shortly thereafter, Tara Steele wrote about Chase’s CEO’s snide public remarks. “Dimon said, “Principal writedown for people who couldn’t pay their mortgages? Yeah, that’s off the table.” This statement is a direct result of the OCC offering a substantially smaller settlement that doesn’t include mortgage writedowns. This isn’t a simple case of a lone bank exec getting cocky, they have government infighting to lean on.”
This isn’t the first time a Chase executive has put their foot in their mouths. In April 2010 during a Congressional hearing, when Barney Frank asked Lowman who troubled homeowners that felt bank employees weren’t helping them save their homes could go to, Lowman said “come to me” and was “mobbed” after the hearing by an advocacy group who presented pages of evidence of Chase’s reneging on their promise to help homeowners.
Last fall, all hell broke loose in the banking world when multiple states sent letters out demanding a freeze on all foreclosures until they could fully investigate the processes with Chase named in every case of state attorneys general demands.
Entertaining to some but serious to others, in the spring of 2011, a group met on the steps of Chase headquarters to perform a real exorcism on the “evil empire” of Chase. “A New York Communities for Change study points to failed HAMP results and claims JP Morgan Chase has refused to modify loans responsibly. “Affordable, permanent, transparent, and timely mortgage modifications using principle reduction are necessary to protect New York families, communities and economies.” As a result, Churches United to Save and Heal (CUSH, a New York coalition of dozens of religious leaders) recently organized a protest in front of JP Morgan Chase’s world headquarters on Park Avenue in New York City to rid the bank of the demons of “selfishness and avarice,” based on the aforementioned study’s findings that 6% of New York homeowners seeking a loan modification have gotten it in the past year, leaving 94% unserved.”
This week, because of poor handling of modification of HAMP loans, the “Feds say the big three banks are failing to prevent foreclosures, citing poor evaluation of income requirement evaluations, therefore, the government says they will stop paying for their modifying delinquent loans.”
Finger pointing
Recently, the FDIC started suing. “In the largest bank failure in American history, WaMu was seized by the FDIC in 2008 which facilitated its sale to JP Morgan Chase. The FDIC maintains receivership of WaMu and has filed a lawsuit demanding a jury trial against [mortgage servicer] LPS, seeking to recover $154,519,071.10.” Also, “The crux of the allegations is that because the appraisals provided to WaMu were so negligent and “contained substantially inflated appraised values” and subsequently “WaMu would not have made the residential mortgage loans at issue and would not have suffered losses on those loans.’”
Similarly, the FDIC is suing CoreLogic, “The suit alleges “repeated breaches of contractual provisions” specifically regarding competent and legal appraisals which the FDIC claims CoreLogic did not provide, also allegingthat eAppraisalIT had inadequate “quality control” and often “inflated” appraisals.”
It will be interesting to see how banks implode on their own staff members, starting with Chase. The finger pointing blame game is about to begin and we predict that it will get nasty.
Michael Hon
June 22, 2011 at 1:37 pm
Chase is the worst bank to work with on short sales. This article does not surprise me.
barbara brandkamp
July 17, 2011 at 2:20 pm
Chase has victimized me since June 2010 by misrepresenting the activity on my mortgage account. By not applying monthly mortgage payments, using suspense accounts to hold the funds in limbo, accessing late fees because they did not apply timely payments, creating an escrow account because they erroneously paid property tax in florida that I paid. Because of their mistake they began a campaign of egregious practices including extortion.
I started to receive monthly statements that included an extra $312. that made no sense. But by withholding and illegally not posting mortgage payments, adding a dollar amount that had no basis in reality, failure to recall the tax funds they sent in error, they ruined my credit rating. In conjunction with the above, they placed and cancelled homeowners insurance. I had paid the homeowners insurance.
All attempts to correct their deliberate falsification of my mortgage account has lead to over 100 letters from Chase that ran the spectrum of: default threats, foreclosure threats, home loan modification offers, sign on the dotted line loan modification applications, attend seminars, change of address, let's be friends, threats to go to my house to winterize it at the beginning of the hot weather and other bizarre letters.
Because the letters initiated by Chase come from all over the United States, it is impossible to speak to anyone, they use voice mail and never return the call, their customer service area must be outsourced because the people cannot answer any questions that go off script. By insulating any communication to Chase enables them to compound their egregious behavior.
I wrote 2 letters to jamie dimon ceo of chase who had a staff member answer the first one. All the facts surrounding my problems with Chase were lies, in essence I was still the victim. They were going to close the escrow account, close the suspense accounts but make me pay mortgage payments dating back until January 1, 2011. By crediting back the funds held in suspense, crediting back the late fees, closing the escrow account, there would be no reason for them to extort more money from me. I sent them a check for $405 in 2010 that disappeared.
I did receive an escrow statement for 2011 adding an additional $75 to the regular payment of $585.81. Chase paid the 2011 property tax even though i sent them a letter not to do it. The property tax was $899 that I would have agreed to but instead of sending a statement with those figures, I received a default statement demanding $2,890. to be paid immediately.
Jamie Dimon is a pompous ass who is a disgrace to the banking industry. I was never late with my mortgage payments until Chase began their illegal activities.
The banking system has no regulation at all, they get kick back money from the government for their loan modifications, they are insulated from prosecution because the country would fold if there was a run on the banks.
To further confuse the mortgage fiasco, insurance companies have joined the deceit by cancelling homeowners insurance for no other reason than to create havoc. Once the bank receives the notice that the homeowners insurance was cancelled, the onus is on the homeowner to prove there is no merit to the accusation.
I am the victim of an institution that is not honest, has no integrity and brought this country to the brink of failure.