The J.P. Morgan Chase Watch
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Updated April 7, 2008 Click here for Inner City Press front page Click here for media reports
For some previously coverage, see, e.g., "Chase - Bank One Merger Review Airs Dirty Laundry," by Russ Wiles, Arizona Republic, June 27, 2004, Pg. 4D; "Merger Menace: A David Takes on Banking Goliaths," by David Weidner, CBS.MarketWatch and AFX.com, April 23, 2004; "J.P. Morgan Makes $800 Billion Pledge," by Jennifer Harmon, National Mortgage News, April 19, 2004, Pg. 2; "Critics Voice Concerns on Takeover of Bank One," by Leon Lazaroff, Chicago Tribune, April 16, 2004; "Banks Make $800 Billion Promise: Bank One, J.P. Morgan Chase unveil community aid; merger hearings start," by Ken Stammen, Columbus Dispatch, April 16. 2004; "JPM Chase Makes CRA Pledge; Faces Merger Scrutiny," by Liz Moyer, American Banker, April 16, 2004, Pg. 18; "JP Morgan, Bank One To Help Poor Communities," Associated Press, April 15, 2004; "Fed Urged to Block JP Morgan/Bank One Merger," by Victoria Thieberger, Reuters, April 15, 2004; "Group Opposes Bank One Sale: Business with Predatory Lenders a Concern," by Ken Stammen, Columbus (Ohio) Dispatch, April 15, 2004; "J.P. Morgan Merger Slammed," by Nancy Dillon, New York Daily News, February 24, 2004, Pg. 67; "Grievance Against JPM / Bank One Deal," American Banker, January 23, 2004, Pg. 3; "Consumer Group Protests Bank Deal; Cites concerns for minority and low-income customers," by Kelly Quigley, Crain's Chicago Business, January 22, 2004. On February 23, 2004, ICP filed even more detailed comments. J.P. Morgan Chase, which is a top-ten subprime lender and securitizer, began quietly in August 2003 seeking to preempt all states' anti-predatory lending laws, by shifting its nationside consumer finance lending into a federally-regulated savings bank. Later, Chase shifted from a New York State-chartered bank to a national bank. ICP, long concerned with Chase's disparate lending, began an inquiry into complaints filed against Chase with state regulators -- a venue that Chase now seeks to escape. Some of these complaints are summarized below on this page, and are now being raised by ICP in opposition to Morgan Chase's April 2006 proposal to acquire 338 branches from Bank of New York. For or with more information, contact us.
Update of April 7, 2008: In the first study of the just-released 2007 mortgage lending data, Inner City Press / Fair Finance Watch finds that JPMorgan Chase in 2007 confined African Americans to higher-cost loans above this rate spread 2.44 times more frequently than whites, according to Fair Finance Watch. Chase's disparity to Latinos was 1.60. The percentage of Chase's loans which were over the rate spread actually went up from 2006 (19.28%) to 2007 (20.96).
In its headquarters Metropolitan Statistical Area (SA) of New York City, Chase confined African Americans to higher-cost loans above the rate spread 2.92 times more frequently than whites. Chase's disparity to Latinos was 2.50.
In the New Orleans MSA Chase confined African Americans to higher-cost loans above the rate spread 2.25 times more frequently than whites. It denied over 50% of mortgage applications from African Americans. Meanwhile the Federal Reserve is bending if not breaking applicable law to allow Chase to acquire Bear Stearns and bail it out from its speculative involvement in predatory lending.
Update of March 31, 2008: While the Federal Reserve at least agreed to hold two public hearings on Bank of America's application to buy Countrywide Financial, it has remained silent on its highly-questionable bail-out of Bear Stearns via JPM Chase. ICP Fair Finance Watch has submitted a second comment:
March 30, 2008
Board of Governors of the Federal Reserve System
Attn: Chairman Ben Bernanke, and Secretary & FOIA Officer
20th St and Constitution Ave, N.W. Washington, DC 20551
Re: Second Comment and Freedom of Information Request Regarding the FRS' Communications with, Consideration and Authorization of JPMorgan Chase (with its affiliates, "Applicants") to lend to and acquire Bear Stearns (with its affiliates, "Target")
Dear Chairman Bernanke and others in the FRS:
On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, "ICP"), this is a second comment and request under the Freedom of Information Act (5 U.S.C. § 552; "FOIA") regarding the Federal Reserve System's (the "FRS'") communications with, consideration and authorization of JPMorgan Chase (with its affiliates, "Applicants") to lend to and prospectively acquire Bear Stearns (with its affiliates, "Target").
While JPM Chase is claiming that it somehow has the necessary regulatory approvals, it is imperative that the FRB conduct a public review of this unprecedented proposal, including in light of the material hereby formally submitted to the FRS. ICP hereby contends that regulatory approval is needed, that public input must be allowed, and that the FRB is conflicted in reviewing this transaction and these requests, as it has become a participant in the deal and underlying predatory loans.
Bear Stearns' involvement in questionable subprime lending led to its problems. Now it has emerged, with documentary proof, that JPM Chase has been involved systemically in the worst forms of predatory lending, fraudulently inflating borrowers' income in order to make loans they can't afford. See, now in the public record, Chase's memo about how to "game" its ZiPPY system:
ZiPPY Cheats & Tricks...
If you get a "refer" or if you DO NOT get Stated Income / Stated Asset findings.... Never Fear!! ZiPPY can be adjusted (just ever so slightly)
Try these steps next time you use Zippy! You just might get the findings you need!!
* Always select "ALTERNATE DOCS" in the documentation drop down.
* Borrower(s) MUST have a mid credit score of 700.
* First time homebuyers require a 720 credit score.
* NO! BK's OR Foreclosures, EVER!! Regardless of time!
* Salaried borrowers must have 2 years time on job with current employer .
* Self employed must be in existence for 2 years. (verified with biz license)
* NO non-occupant co borrowers.
* Max LTV/CLTV is 100%
Try these handy steps to get SISA findings . . .
1) In the income section of your 1003, make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus.
2) NO GIFT FUNDS! If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds on the rest of your 1003.
3) If you do not get Stated/Stated, try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets.
It's super easy! Give it a try! If you get stuck, call me . . . I am happy to help!
See also,
Subj: Chase Home Finance LLC
Date: 3/27/2008 11:31:14 P.M. Eastern Daylight Time
From: [Name withheld in this format]
To: Inner City Press
Please take a look at what Chase Home Finance LLC is doing.
If it weren't happening to me, I would think this was a scam.
They haven't to my knowledge started any foreclosure proceedings yet, but although I am current on both my mortgages, they are sending letters/statements that I am 2 months behind.
Here in Georgia (a non-judicial state for foreclosures) one only has to be 3 months behind.
I have emailed Chase, written to them, to no avail. I refuse to answer their calls as I find them to be harassing and the one time I did call them, I was assured that all was well. Yet I still receive incorrect statements.
Something needs to be done on behalf of those who have already fallen prey and those who may become victims.
Not only due to the highly-questionable FRB assistance to the bail-out of a bottom-feeding investment bank by an above-confirmed predatory lender, but also the above consumer fraud issues, the FRB must hold public hearings.
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