As reported today on Bloomberg.com:
JPMorgan Chase & Co. (JPM), the second-largest U.S. bank, ousted mortgage chief David Lowman after it overcharged active-duty military personnel on loans and improperly foreclosed on other borrowers.
“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.
“We thank Dave for his five years of service to our firm,” Bisignano said in the memo. “He worked here during extraordinary times and has said he will take some much needed time off.” A message left at Lowman’s office wasn’t immediately returned.
High Losses
Chief Executive Officer Jamie Dimon, 55, said JPMorgan’s record $5.6 billion in profit during the first quarter was tempered by “extraordinarily high losses we still are bearing on mortgage-related issues.”
“Unfortunately, these losses will continue for a while,”Dimon said in a statement on April 13 when the bank reported results. JPMorgan’s performance has been hampered by poor performing mortgage portfolios acquired when it bought Washington Mutual Inc. and Bear Stearns Cos. in 2008.
In April, JPMorgan agreed to pay $56 million and to reduce mortgage rates for all deployed soldiers to settle claims that it overcharged military personnel on their mortgages and seized homes of 27 active-duty military personnel who were protected by the Servicemembers Civil Relief Act.
Dimon said the military foreclosures were the worst mistake the bank has ever made.
“We deeply apologize to the military, the veterans, anyone who’s ever served this country and we’re trying to go way beyond” what is needed to correct the errors, he said at the company’s May 17 annual shareholder meeting. “We’re sorry.”
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That should probably read: “We’re sorry we got caught and we had to sacrifice someone – so long Mr. David Lowman.”
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