Yahoo! News Story - JPMorgan dismisses mortgage head Lowman - Yahoo! News

JPMorgan dismisses mortgage head Lowman - Yahoo! Newshttp://news.yahoo.com/s/nm/20110614/bs_nm/us_jpm_mortgage_3
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Why am I highlighting this article over other similar ones posted on the internet?

This one has a bit more meat than the others and one can appreciate that if you've been in this business for awhile. My comments from this point on are in blue.

"Lowman joined JPMorgan from Citigroup in 2006. During his tenure at JPMorgan, the bank picked up bad mortgage assets through its acquisitions of investment bank Bear Stearns & Co and retail bank Washington Mutual. They make it sound as though they picked up a germy virus. No, they willingly bought the bad loans of these two companies.

acquisitions: a decision made at a meeting by all the major banks at the time and the Fed of what company among them could bear (pardon the pun) the debt that WAMU and BS had on their books. WAMU's underwriting was crap due to long standing technology issues. Among other loans purchased, BS was buying up much of the remaining RTC securitizations and repackaging them trying to make a pool of marginally performing loans shiny, newish and attractive to investors. JPMC knowingly bought bad mortgage assets by acquiring these companies. WAMU in September 2008 after a FDIC seizure. http://www.huffingtonpost.com/2011/01/25/bear-stearns-fraud-emails_n_813855.html

Lowman was pushed aside in February by JPMorgan's CEO, Jamie Dimon, who assigned his top aide, Bisignano, to the company's retail banking unit to fix its mortgage business.

If you look up Frank Bisignano on Forbes.com, you can see that he has a been at Citigroup since 2000. If you look up David Lowman, you can review on  the press release that he came from a place where he appeared to have no or minimal mortgage background. http://www.forbes.com/2006/10/27/leadership-careers-jobs-lead-careers-cx_ll_1027hfr.html

During Lowman's tenure, the unit was so disorganized that the bank seized homes of at least 33 U.S. military servicemen on active duty, violating federal law and prompting Dimon to apologize at the company's annual shareholder meeting. The bank has said it is forgiving those loans.


The above paragraph is particularly nasty because of the Soldiers & Sailors Civil Relief Act that was revised and went into effect in 2003 (one of the good things that came about during the Bush presidency) which grants certain protections for military troops on active duty. Protections like the fact that you cannot foreclose on the home of active military personnel.

Lowman could not immediately be reached for comment on Tuesday. Technically, he can't comment because he'll sign a paper that says he can't discuss any business dealings by his former employer. Lowman appeared before congressional committees last year ( http://www.ncsha.org/blog/house-and-senate-committees-address-foreclosure-crisis-and-loan-modification-problems ) where he was chastised for his division's refusal to cooperate with borrowers and modify mortgages. Read the article. Ahem - we learned a new word today kids - robo-signing. Now we're making up words because acronyms in the mortgage industry are not confusing enough. Reminds me of dangling chads and how the general public had no clue what the news media were talking about at the time.

I imagine Lowman was probably told by the CEO to minimize losses. Regarding loan modifications: Simply put, if you don't have an earned income (many people lost their jobs over the credit crunch), you won't get your loan modified. If you don't want to provide your financial statements (because you're trying to hide the fact that you didn't qualify for the loan in the first place), you won't get your loan modified.  If you botch the documents requested of you in anyway (late, missing, erroneous), you won't get your loan modified. If you don't like the terms of your loan, they suggest that you refinance instead. 

Lowman said in a June 2010 hearing that the bank was understaffed, (at that point they probably had a RIF throughout the  entire organization, not just in mortgage lending) but was adding employees to work on problematic mortgages. They opened temporary regional offices called "ChaseWorks" dedicated to help distressed mortgagors.
 In a hearing in November, Lowman acknowledged mistakes in foreclosure paperwork and said the bank was cleaning up errors." Mistakes happen, but they can also be fixed.