JPMorgan has finally made an internal change in its mortgage department, after months of the firm receiving tons of negative press about their foreclosure practices.First the firm found 56,000 foreclosures its employees didn’t even read before putting the homes into foreclosure.
Then stories like this one started popping up: A henchman hired by JPMorgan broke into the home of a woman who says she was 3 months late on payments but was never warned of a foreclosure (reportedly, the bank had thought it was abandoned, even though she’d been paying electricity bills, etc). There were others like it.
Then JPMorgan foreclosed on the homes of U.S. soldiers. Soldiers in active duty are protected from foreclosure by law; a bank can’t convict you while you fight for the country. Chase had foreclosed on 27 soldiers anyway.
The firm’s CEO, Jamie Dimon, immediately apologized for the illegal foreclosures and initiated a few programs designed to help soldiers and veterans (including a multi-million settlement for the 27 soldiers who were wrongly foreclosed on). That helped.
But then he said foreclosure gives debt relief to those who need it. Eek.
And THEN in June, a JPMorgan mortgage borrower, Tom Collette, told the Huffington Post a heart-breaking story about his son Aaron, a solider, who had been fighting for the country in Iraq when his squad was hit with an explosive device. (Luckily no one was harmed.)
After the scare, the soldiers got to pick a destination for a temporary leave from war and Aaron chose home, where he’s headed in August. Unfortunately, his house might not be there when he arrives. JPMorgan is foreclosing on it, because while the bank enacted several measures to ensure that another soldier doesn’t get wrongly evicted, it didn’t look out for the soldier’s families.
Instead, the bank let something like this happen, according to what Collette told HuffPo:
When he first asked for help in 2008, he had not missed any payments. At the time, his mortgage was being handled by Washington Mutual, a subprime lending specialist Chase purchased in the fall of 2008. Collette said WaMu told him he would only qualify for a loan modification if he missed two of his $1,100 monthly mortgage payments. So he missed the payments. And the bank began trying to foreclose on him.
Another PR disaster commenced.
Someone had to get fired for all of this and finally, someone has.
Bloomberg has the news:
“Dave Lowman and I have decided he will leave the firm,” Frank Bisignano, the head of home-lending, said today in an internal employee memo obtained by Bloomberg News.
JPMorgan has been taking steps this year to repair its mortgage unit, which posted at least $3.3 billion in losses during the first quarter. Lowman, 54, who ran home-lending since leaving Citigroup Inc. (C) in 2006, was directed in February to start reporting to Chief Administrative Officer Bisignano, 51. The New York-based bank then hired Cindy Armine, Citigroup’s chief compliance officer, last month to increase oversight as chief control officer of home-lending.
You might remember Dave Lowman as the guy who told homeowners, “Come to me,” and then “ran like a dog with his tail between his legs,” when 50 homeowners approached (mobbed) him during a hearing about foreclosure practices, according to someone who was there.
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