JPMorgan wants foreclosure problem fixed quickly

By Reuters
Posted Nov. 17, 2010 at 11:47 a.m.

JPMorgan Chase & Co.’s chief financial officer on Wednesday joined a growing chorus of industry executives calling for a speedy resolution of the probes into the industry’s foreclosure practices as a settlement may be on the horizon.

“We work very hard with our regulators to come to the right answer and we hope to do that quickly as well,” said JPMorgan CFO Doug Braunstein, speaking at the Bank of America Merrill Lynch financial services conference.

Braunstein’s comments come as the largest U.S. mortgage lenders and the 50-state attorneys general are negotiating a settlement of investigations into the industry’s foreclosure practices, according to media reports.

The state attorneys general, led by Iowa’s Tom Miller, are negotiating with each of the largest mortgage lenders — Bank of America Corp, JPMorgan and Wells Fargo & Co — independently, but are pushing for a nationwide fund to compensate home owners whose houses had been improperly repossessed, the Washington Post reported on Wednesday.

The size of the fund and how homeowners could be compensated is still being debated, the newspaper reported, and any settlement would require more work on loan modifications from the banks.

One day earlier, Bank of America Chief Executive Brian Moynihan told the same conference a quick settlement would be the best possible outcome.

“It is in everyone’s best interest to get this settled and behind us,” Moynihan said on Tuesday.

New York-based JPMorgan halted home foreclosures in 23 U.S. states in October, pending a review of its internal practices, and has been one of several large mortgage lenders at the center of a public firestorm over home repossessions.

Critics allege the major U.S. mortgage lenders cut corners in foreclosures, namely using so-called “robo-signers” — employees who signed thousands of foreclosure documents daily without properly reviewing them.

Braunstein said the foreclosure halt will increase JPMorgan’s foreclosure costs by “a few hundred million” per month, and those costs will begin appearing in the bank’s financial results in the coming quarters.


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