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JPMorgan Ousts Mortgage Chief Lowman

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.”

________________________________________________________________

That should probably read: “We’re sorry we got caught and we had to sacrifice someone – so long Mr. David Lowman.”

JPMorgan Names New Head for Mortgage Business

Read the latest propaganda from Chase…Lowman demoted; Jamie Dimon’s righthand man is Frank Bisignano, now heading up Chase Home Lending…

Hoping to troubleshoot some of the problems plaguing its mortgage operations, Jamie Dimon dispatched one of his top lieutenants to oversee the Chase Home Lending business.

Frank Bisignano, JPMorgan Chase’s chief administrative officer, will now add supervision of the Chase mortgage origination and loan payment collection businesses to his other duties, which include managing technology and real estate for the bank. David Lowman, the current head of Chase Home Lending, will retain his title but report to Mr. Bisignano.

The management change comes as Chase’s mortgage business has faced considerable challenges as a result of the recession. Chase, like most of its peers, has faced enormous losses on its large portfolio of home equity and mortgage loans after loosening its lending standards during the housing boom. But it has also struggled to digest the mortgage operations that it acquired with its takeovers of Washington Mutual and Bear Stearns during the financial crisis.

Many parts of the business ran on separate technology systems, making a three-way integration especially tricky. At the same time, Chase has come under fire from Washington for failing to cope with a giant wave of foreclosures as well as overcharging several thousand military veterans.

“The mortgage business for everybody has changed tremendously,” Mr. Bisignano said in a brief interview on Friday. “Adding help to it can never be a bad idea.”

Charles W. Scharf, the head of Chase Retail Financial Services, and Mr. Lowman have had their hands full contending with all of these issues over the last few years. They have significantly tightened the bank’s lending standards, halted the sale of new mortgages through independent brokers and overhauled the bank’s servicing operations. They have also hired thousands of employees and improved technology to try to keep up with the foreclosure mess.

In 2010, Chase also began cordoning off its existing portfolio of real estate loans from those that conformed to its tougher new standards, a so-called good bank/bad bank strategy that has been used frequently by financial institutions to restructure their operations.

But with Mr. Bisignano, Mr. Dimon is installing one of his strongest managers with a long history of overseeing the operations of several banks. He also comes from a family of veterans, which will be crucial to smoothing relations with lawmakers, regulators and military leaders.

Mr. Bisignano, a trusted lieutenant of Mr. Dimon, followed him to JPMorgan Chase in 2005 as his chief administrative officer. Mr. Bisignano was charged with consolidating the bank’s real estate and identifying other cost-saving measures.

At Citigroup, Mr. Bisignano ran its global transaction services business and helped oversee technology and operations for its investment bank. Mr. Bisignano, 51, will report to both Mr. Dimon and Mr. Scharf.

Here is the email from Mr. Dimon and Mr. Scharf:

As you know, our Home Lending business has gone through a period of enormous challenge and change. Our team has worked day and night for almost three years to deal with the unprecedented credit environment and the added complexity from the WaMu and legacy Bear Stearns EMC merger integrations.

We recognize how much we’ve accomplished, but know we still have a great deal of work ahead of us. Given the importance of this business to our company and our customers, we’ve asked Frank Bisignano, our Chief Administrative Officer, to take on additional responsibilities and get more directly involved in managing this business. Effective immediately, Dave Lowman, CEO of Home Lending, and his team will report to Frank.

Frank will continue to report to Jamie as CAO and will report to Charlie on Home Lending, which will remain part of Retail Financial Services. He continues on the firm’s Operating Committee and Executive Committee, and joins the RFS Management team.

Frank is a great partner to all of us and an extraordinary operating executive. He is an integral part of all six of our lines of business, and we are thrilled to be able to leverage his leadership and experience more directly in Home Lending.

We have a leading Home Lending business. Chase is the third-largest mortgage lender and the #3 mortgage servicer in the country. We have 8 million customers who are living in a home with a Chase mortgage. When customers have difficulties, we do everything we can to help them find a way to avoid foreclosure. We have offered more than 1 million modifications and prevented foreclosure for more than 480,000 customers. We recently announced that we are opening another 25 Chase Homeownership Centers, bringing our total to 76 in 23 states and the District of Columbia.

We look forward to working with Frank to make our Home Lending business even stronger.

________________________________________________________________________________ 

I think they mean to say they look forward  to continuing the bankster shell game of preying upon legions of beleaguered homeowners who just want to work out a payment plan with their lender in order to remain in their homes; the shell game being the charade of pretending to help with no intention of actually providing any help at all.

Chase Home Lending Vice President calls about letter to David Lowman seeking answers

May 12, 2010: 3:30 pm: Deana DeLaura (214) 626-2671 called from the Chase Home Lending Executive Office, allegedly in response to my asking for a response to my April 19, 2010 letter to David Lowman. I asked if she was Shawnte Trowlsdell’s direct supervisor. Ms. DeLaura said she was not but she was a “manager in the division” and had reached out to help. They were in the process of “composing a response to my letter” and wanted to let me know they were working on it. I found this very hard to swallow.

It seemed more than coincidental that my numerous letters to Jamie Dimon at Chase (dating as far back as December 16, 2009) had been unanswered, my letter to Mr. David Lowman was already in-house for almost a month and yet suddenly a supervisor just took it upon herself to reach out, shortly after a Wall Street Journal reporter called Chase looking for answers. I didn’t buy it for one minute. No one had bothered to acknowledge any of my prior letters (I’d learned they were all placed in my “Hardship Letter” file from Natalia Carrillo [Chase Home Finance ]) so why the sudden about-face?

Perhaps it would take the Wall Street Journal to get answers from Chase about my loan modification – that was just plain wrong.

The Chase Home Lending Shell Game

April 25, 2010, 3:55 pm: Natalia Carrillo called from Chase (800) 848-9380 ext. 382-3158, wanting to discuss my loan. I figured she was looking for money but as the call unfolded I realized she was my new contact. I asked what happened to Olga Danilova, was she off the case? Natalia said a lot had changed at Chase and there were “new processes”; she was tasked with getting the files moving. She went on to say that previously Chase had been doing three-month trial modifications and then determining if the loan qualified for a permanent modification (implying that Underwriting was reviewing the loan during or after the trial modification).

Natalia said Chase was “not going to waste people’s time” putting them in a trial modification and then determining they didn’t really qualify. (Interesting – Chase had wasted fourteen months of my time when even a three-month trial modification would have made a world of difference to me). Per Natalia, they were now doing the Underwriting first; she required a complete package so there would be no questions for Underwriting and after a decision from Underwriting they were only doing trial modifications on “qualified” loans. I should have asked right then what a “qualified” loan was…

I told Natalia it seemed like we were in a parallel universe…what happened to all the stuff I’d submitted since February 24, 2009 and what about my conversations, follow-up, denials, re-openings and re-submissions with Jacqueline Ham, Megan Valdivia and Olga Danilova at the Chase Home Lending Executive Office? Natalia said since I was now over two months past due, the file had moved on to her area and she was responsible.

Natalia went on to review much of the paperwork I’d submitted and told me that some additional and updated paperwork would need to be submitted. She was extremely thorough and opened many files (the files seemed to be in a pdf format). She asked questions about some things she found unclear and she walked me through a required list of documents which she said could all be found on the Chase web site at https://www.chase.com/ccpmweb/chf/document/Borrowers_Assistance_Form_Chase_2009.pdf  She told me I needed to download, print, complete and return several forms, and provide more copies of checking statements and pay stubs. She said my 4506-T had expired (it was only good for 90 days) and it was essential I submit a new form, the RMA Hardship Affidavit. Essentially Natalia Carrillo was requesting yet another loan modification application. She noted there was a “Hardship Letter” in my file dated April 5, 2010, but I still needed to submit the RMA Hardship Affidavit.

Natalia’s reference to an April 5, 2010 “Hardship Letter” made no sense. I told her I’d submitted a handwritten hardship form “inside the box” on the modification application sent 12/11/09, as well as the original submitted February 24, 2009 – what letter could she be talking about? Natalia opened the file and said, “Oh, it’s a letter to Jamie Dimon. She then scrolled down further and saw additional faxes and letters I’d sent, none of which had anything to do with hardship.

I could now understand why I’d not heard back from Jamie Dimon – all of my letters to Jamie Dimon, Chairman and CEO JP Morgan Chase, were electronically filed and forgotten, along with faxes offering explanations, clarifying details, outlining the situation and offering solutions. I should have asked if my letter to David Lowman Chase Home Lending CEO was in there but I didn’t.

Natalia next looked at a utility bill and asked about my residency; I said perhaps she’d want to scroll down further in the “Hardship” file to my Cape May County, NJ Voting Record. Natalia demurred; saying, “I see your 2008 tax return has the address, that’s sufficient”, then she requested updated utility bills at the service address anyway! Natalia asked if I could submit everything within a week and I said it would be in her hands by 4/28/10 at the latest. She said she’d mark the files for a 4/29/10 follow-up and we ended the call.

Mr. David Lowman, Chase promised loan modification answers!

April 22, 2010, 1:44 pm: I emailed a copy of my April 19, 2010 letter to David B. Lowman, CEO Chase Home Lending, even though I had a USPS Certified Mail delivery confirmation dated April 21, 2010 at 10:54 am. I really needed answers about my loan modification. It made sense to test out the Chase e-mail protocol I’d deduced and verify the David Lowman Chase contact information, so I sent David.B.Lowman@chase.com  a copy of my letter; it was not returned as undeliverable. Mr. Lowman might be like Jamie Dimon – his assistants might intercept his mail and redirect it to the Chase Home Lending Executive Office; this sort of document hand-off often resulted in problems. Of course Mr. David Lowman might also be out of the office to testify before Congress again.

Mr. David Lowman, Chase promises loan modification answers…

April 19, 2010, 4:47 pm: I decide to write a letter to Mr. David B. Lowman, CEO Chase Home Lending, and take him up on his testimony before the House Committee on Financial Services. In addition to the letter I outline my attempts to get loan modification answers in a nineteen page enclosure and send it to Chase Home Lending CEO Mr. David Lowman via Certified Mail, copying Jamie Dimon, Chase CEO; Senator Frank Lautenberg; Senator Robert Menendez; Congressman Frank LoBiondo and Philadelphia Inquirer real estate columnist Alan J. Heavens. Mr. Lowman promised answers; after almost fourteen months of trying to play by Chase’s ever-changing and secret rules, I need an end to opaque banking procedures and I need straight answers. This predatory loan originated by Washington Mutual and serviced by Chase must be modified.

Chase, I need answers and a loan modification!

April 19, 2010, 8:40 am: Received an e-mail from Olga Danilova at Chase Home Lending Executive Office:
Hello Ms. Wright, I have not received a response on your account from our loss mitigation area. But from what I can tell your account is still being reviewed. Thank you.

I freaked out; I could see what was going to happen: I’d get one e-mail a week from Olga with no news and in the meantime, Chase would continue the predatory loan practices devised by Washington Mutual and foreclose. I had to get answers. I’d written my congressman, my state senators, even Jamie Dimon at JP Morgan Chase, and a case had been opened with the Comptroller of the Currency. What else could I do?

I searched the internet for answers and stumbled upon the testimony of Mr. David Lowman, Chase Home Lending CEO, before the House Committee on Financial Services April 13, 2010; he said that people seeking answers from Chase should come to him. I don’t have a television and I’d not heard this offer on the radio or read it in the newspaper – I can’t believe it’s true, but it is. I saw the testimony myself.

What does home equity mean to Chase?

January 28, 2010, 3:45 pm: Jacqueline Ham phoned me. We discussed what it meant to be denied a modification for “too much” equity and how I might get a copy of my denial letters. Jacqueline committed to send a letter recapping the 8/25/09 denial based on: property exceeds guidelines/too much equity. Jacqueline said I should call the Chase Home Ownership Center in Media, PA on March 2, 2010 once I was officially 31 days late and try to schedule a March 3, 2010 appointment rather than wait until 3/18/10 as I’d planned.

I asked her what the guidelines were regarding “too much equity”. Was it a dollar amount or a percentage? Because if I had too much equity in 8/09, why would it be any different now? (If I’d pulled my head out of the sand I might have realized property values were dropping by the minute and my equity could have radically diminished in five months). Was there a number one had to be above or below? She said these were good questions; she would ask and get back to me Tuesday 2/2/10 at the latest with answers. I asked what other Chase loan modification programs there were beyond Obama’s Making Homes Affordable and she said there was only one. She also noted I was still in Loan Review and she asked that it be escalated.

February 2, 2010 9:00 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity formula and the status of my modification request. She was not available. I left a detailed voice mail.

February 4, 2010 9:15 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity formula and the status of my modification request. She was not available. I left a detailed voice mail.

February 5, 2010 8:30 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity formula and the status of my modification request. Her mailbox was full and not accepting messages.

February 5, 2010 11:30 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity formula and the status of my modification request. She was not available. I left a detailed voice mail.

February 6, 2010: Received a letter postmarked January 28, 2010. It was the long sought-after August 25, 2009 denial letter from Washington Mutual. Jacqueline Ham had delivered the goods. It was a form letter, customized with my name, address and account number, with a space left open to accommodate a denial reason. The letter read as follows:

Washington Mutual (FL5-8806)

August 25, 2009

Martha Wright

*** * **

Avalon, NJ *****

Statement of Eligibility for Loan Modification

Account ********** (the “Loan”)

Property Address: *** * ** Avalon NJ ***** (the “Property”)

Dear Mortgagor (s)

Washington Mutual is writing in response to your recent request regarding a loan modification on the above-referenced account through the Making Homes Affordable (MHA) program. After researching your account, we have determined that at this time you do not qualify for a modification under the MHA program or any other program we offer for the following reason(s):

Your property equity exceeds our program guidelines.

If your Loan is current, you may be able to qualify for refinance that may provide you with more favorable terms than you have now. If you are interested in finding more out about that option, please contact us at (866) 888-5935.

If your Loan is delinquent, we may be able to offer alternatives to help avoid the negative impact a possible foreclosure may have on your credit rating, the risk of a deficiency judgment being filed against you, and the possible adverse tax effects of a foreclosure on your Property. If you are interested in discussing these possible alternatives, please contact Customer Care immediately at (866) 926-8937.

Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You have a right to receive a free copy of your report from the reporting agency, if you request it no later than sixty (60) days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency by contacting the agency at the number provided below:

Transunion

P.O. Box 2000

Chester, PA 19022-2000

(800) 916-8800

FEDERAL ECOA NOTICE* (*Removed for brevity)

If you have any questions, please contact us at the number provided below. At Washington Mutual, we value you as a customer and want to ensure your continued satisfaction.

Sincerely,

Imminent Default Department

Washington Mutual

(888) 708-3336

For California customers, …* (*Removed for brevity)

Washington Mutual is attempting to collect a debt, and any information obtained will be used for that purpose.

We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.

To the extent your original obligation has been discharged, or is subject to an automatic stay of bankruptcy under Title 11 of the United States Code, this notice is for compliance and/or informational purposes only and does not constitute a demand for payment or an attempt to impose personal liability for such obligation.

LM001

February 9, 2010 10:45 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity ratios and the status of my modification request. She was not available. I left a detailed voice mail.

February 10, 2010 10:30 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity ratios and the status of my modification request. She was not available. I left a detailed voice mail.

February 12, 2010 8:15 am: Phoned Jacqueline Ham to follow up on our January 28, 2010 conversation and get answers on my denial, the equity formula and the status of my modification request. She was not available. I left a detailed voice mail.

February 12, 2010 10:00 am: Phoned Chase (866) 550-5705 and was advised my loan was still in review. I asked to be transferred to Imminent Default and was disconnected.

February 12, 2010: I received a letter dated February 8, 2010 from Chase Home Finance. The subject line: Issue Still Being Reviewed.

The letter:

Dear Martha Wright:

I am writing in response to your correspondence we received on Monday, December 21, 2009, about a loan modification.

At this time, the matter you brought to our attention is still being reviewed. Please be assured that we will make every effort to provide you with the timeliest response possible.

Chase’s goal is to provide the highest level of quality service to each of our customers. We appreciate your business and value our relationship with you.

If you have any questions in the interim, please contact Jackie Ham (866) 605-9253, extension 4663, Monday through Friday between 8:00 a.m. and 5:00 p.m., Eastern Time

Sincerely,

Home Lending Executive Office

Was this in reply to my December 16, 2009 letter to Jamie Dimon, Chairman & CEO JP Morgan Chase, or perhaps my letter of January 15, 2010? I hoped not, because the letter said absolutely nothing.

Chase Home Lending Executive Office

I’m guessing that Jamie Dimon, Chairman & CEO JP Morgan Chase, isn’t opening his own mail. He’s probably not reading it either, because after sending him a letter on December 16, 2009, this is what happened:

January 15, 2010: I received a letter dated January 12, 2010 from Chase Home Finance. Jacqueline Ham, a Home Lending Executive Office Analyst in the Home Lending Executive Office, indicated she was “investigating” the issue. The subject line: Initial Response.

The letter:

Dear Ms. Wright:

I am writing in response to your correspondence we received on Monday, December 21, 2009, about a loan modification.

I am investigating your issue, and will work with you to provide you with a complete and accurate response in a timely manner. Chase appreciates your patience in this matter.

Chase’s goal is to provide the highest level of quality service to each of our customers. If you have any questions in the interim, you can reach me at (866) 605-9253, extension 4663, Monday through Friday between 8:00 a.m. and 5:00 p.m., Eastern Time

We appreciate your business and value our relationship with you.

Sincerely,

Jacqueline Ham

Home Executive Office Analyst

Home Lending Executive Office

As I scramble to scrape together the soon to be delinquent February mortgage payment, I realize patience may be a virtue at Chase, but it’s a one-way street. I’ll be paying a late fee in exchange for Chase’s patience.

January 15, 2010: Letters remained on my mind. I’d heard back from Senator Lautenberg’s office and submitted forms authorizing the Senator to take action on my behalf. Congressman LoBiondo provided brochures on HUD, HOPE NOW and a one-page printout “Foreclosure Fast Facts”. (Was he trying to tell me something?) I wrote them both along with Senator Robert Menendez and The Philadelphia Inquirer’s Alan J. Heavens, updating them on the situation and asking for additional help.