As the furor around questionable practices in the processing of foreclosures intensifies, JP Morgan Chase has sought to distance itself from the controversy.
Wednesday saw the attorney generals of all 50 US states announce an investigation into foreclosure practices, and on the same day JP Morgan announced that they had stopped using the industry-owned Mortgage Electronic Registration Systems, (MERS) which is at the center of the controversy.
At the same time, JP Morgan chief executive Jamie Dimon also announced that the lender had expended the scope of its internal review to include over 115,000 foreclosure cases, in more than 40 states. This will essentially delay most of JP Morgan Chase’s foreclosure proceedings throughout most of the country.
Dimon further announced that the bank was setting aside an additional $1 billion to help cover the costs of faulty loans and mortgages that it had to repurchase from Freddie Mac and Fannie Mae, as well as $1.3 billion to cover the costs of mortgage and foreclosure related lawsuits.
Dimon also tried to reassure the public that despite there being issues with documentation practices in foreclosure cases, there were not any instances of wrongful foreclosures, as the underlying information in all cases was correct. He stated that while a month or so of upset in the foreclosure processes won’t matter, but that “If it went on for a long period of time, it will have a lot of consequences, most of which will be adverse on everybody.”
So far the JP Morgan review has found that there were some cases where executives had signed foreclosure forms, without reviewing the case, instead relying on their employees, and also that loan documents in some cases were improperly notarized.
