Stop ‘vilifying’ executives, JPMorgan’s crybaby CEO pleads

(11 am. – promoted by ek hornbeck)

Up front disclaimer, I am suing WaMu and their successor, JPMorgan. You can read the saga here and here. While my battle with them doesn’t change the facts here, it does serve to explain my rage.

“When I hear the constant vilification of corporate America, I personally don’t understand it,” Dimon said in his speech. “I would ask a lot of our folks in government to stop doing it because I think it’s hurting our country.”

Hey Jamie, hear that faint music in the background? It’s the worlds smallest violin. By the time this is over you will be lucky if an angry mob hasn’t come to get your greedy larcenous butt. Trust me Jamie, I want the last payment you get from US, the tax payers you swindled to be a life time vacation, all expenses paid in Sing Sing or Leavenworth. Follow me below the fold for the reality of of Mr. Dimond’s world whether he is willing to acknowledge it or not.

The banking industry has always been “heavily” regulated, though the crisis made it clear those regulations needed to be improved, Dimon said, adding that government oversight should be structured by product, not by company.

“My biggest mistake, probably of my whole career, was not closing down our mortgage broker business sooner,” Dimon said, citing a loss rate two to three times higher on loans not originated by the bank.

Honestly, I can’t stop laughing. Do you really think we are THAT stupid Mr. Dimond? We got in this mess because you and your criminal buddies got all the deregulations you wanted. So much deregulation you came up with totally new scams, er products. You thunk them up and pimped them to everyone you could snooker into believing the lie of easy money and you ALL made billions selling this crap. Not only that but you cleverly insured against failure of these loans, so you could get paid twice. Shut down the mortgage broker business sooner? OH PULEEZE, its still going strong, a person can still get these ARMS that are so profitable for you. We don’t hear about sub prime loans because they are now referred to as nonprime and Alt-A loans. But it the same old lucrative revenue stream. Those Alt-A mortgages are defaulting at the rate of 18%. Because most of them are not facing a rate reset this year NO ONE in the mortgage biz can figure why this is so. Well let’s see, next to no qualifying, inflated selling prices coupled with tanking housing market, big jumps in property taxes and high unemployment. Ought to be a no brainer don’t you think?   Alt_A loans are supposed to be safer and yet it was Alt-A lending that caused the collapse of American Home Mortgage Investment Corp last year. All the banks big in sub-prime have their fingers in Alt-A loans too.

In all fairness to Dimond, he was only 13 when securitizing of sub prime mortgages started in 1970.  So he probably thinks his experience is the only experience and all those pesky regulations probably DO seem restrictive. According to William Poole president of the Federal Reserve Bank in St. Louis, this is how it is supposed to work.

According to the federal banking and thrift regulatory agencies, subprime mortgages are those made to borrowers who display, among other characteristics, (i) a previous record of delinquency, foreclosure or bankruptcy, (ii) a low credit score, and/or (iii) a ratio of debt service to income of 50 percent or greater (Office of the Comptroller of the Currency, et. al., 2007). An Alt-A mortgage-short for “alternative-A” and also known as “A minus”-is one made to a borrower who might be of prime credit quality but who does not qualify for a prime loan because there is something missing or irregular in the loan application. The borrower’s credit record may be incomplete or slightly impaired, or the borrower may be purchasing the property as an investment rather than to live in it (Chomsisengphet and Pennington-Cross, 2006). The borrow can look at the credit cards you can get with no credit and use those cards to put right any mistakes on the current credit rating. An application file is deemed incomplete when it is missing certain information, as, for example, when the borrower is unwilling or unable to document income or assets to the lender’s satisfaction. An irregular application might be one where the borrower does not have a large enough downpayment to satisfy the lender’s standard underwriting criteria for prime credit. Alternatively, the borrower’s credit history may be short, perhaps because the borrower is young. Thus, the non-prime mortgage sector consists of mortgages that entail a borrowing household with a B, C or D credit grade, a non-standard or incomplete loan application or credit history, or all of these.

Those rules are a recipe for disaster and at that the banks couldn’t even comply with those weak guidelines. Mix this up with a stunning level of greed and it is easy to see why and how there are so many violations of predatory lending laws associated with these questionable loans.

It isn’t just their scam loans and investment packages, it is their servicing of loans and their creative bookkeeping that allows them to suck billions every year from their customers. When a bank has millions of mortgages to service an extra charge here and there most people will grudgingly pay, counts up fast. These charges are illegal, all of them from holding payments to trigger a late fee, to inspection fees, to force placed insurance and escrow accounts you know nothing about. We have good lending laws on the books and no one is enforcing them, no one is auditing these banks. If it was done the banks would be facing BILLIONS in fines and in some cases jail time.

The market has been up for the last four days because Citi, JP Morgan and B of A are talking like they are either profitable or going to be very soon. Solvent? Might be if they haven’t spent it all on obscene salaries and bonuses. The point is the only reason they are now eschewing TARP funds is because they got a little look at what regs were coming and the claw back and the anger bubbling just below the surface of the middle class. Remember how they have been saying they are restructuring loans and 53% of them have defaulted again? It’s a lie, they have done nothing. Be sure to ask for proof of the 53% new default rate, they can’t provide it because it doesn’t exist. In fact they are working overtime to take homes away from people who are not behind using their creative and illegal bookkeeping practices. Blame it on all those dead beats who bought homes they couldn’t afford, ask for some proof of that allegation too. Right now there are nearly 3 million homes sitting under the protection of Chapter 13. Three million homes facing foreclosure that weren’t purchased by dead beats because if you can’t pay you can’t enter into a Chapter 13 bankruptcy agreement. The banks have no intention of stopping, nope they aren’t going to leave a penny on the kitchen table of the middle class if they can help it. So no matter how bad all the other indications of the economy might be, the banks are now saying move along nothing to see here. That’s right, just move along, forget all the added regulations, everything is fine. Think about it, if the banks can stave off new regulations they are free to come up with the next big con, if they haven’t already.

These guys like Dimond make “poor” old Bernie Madoff look like a piker. The average citizen can’t keep all these sleazy loser financial instruments straight, or the violations of TILA, HOEPA and RESPA. And now it is all OUR fault? The economy is tanking because we are fed up and vocal about these criminals? The criminals who are in charge of our monetary system. People, the media, the financial pundits, even our President are starting to be fooled by this newest scam from the banks. Now is not the time to breath a sigh of relief, now is not the time to move along. Nope, the Dow isn’t done dropping and unemployment isn’t done rising, we haven’t seen the bottom yet.   I know what I want, in the immortal words of Conan the Barbarian … “crush my enemies, drive them before me and hear the lamentations of the women.”  Realistically, at the very least we should all want to see hard core regulations, the enforcement of existing lending laws and RICO prosecutions in their future.