Were you an unfordable mortgage by Chase and want to know why? This may be the reason, blame Zippy!
Thus reads an internal memo from Chase obtained that accidentally found its way into the hands of journalist Jeff Manning of The Oregonian. It was the basis for an article titled, Chase mortgage memo pushes 'Cheats & Tricks'.
3 "handy steps" for getting a questionable loan approved by JPM Chase's automatic system: 1. Lump all of an applicant's compensation as the applicant's base income, rather than breaking out commissions, bonuses and tips.
2. Do not disclose use of gifts for down payments.
3. If all else fails, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want. Do the same for assets.
The memo deals specifically with stated-income asset loans (known also, tellingly, as “liar loans”) which Chase no longer offers. It’s still a pretty stunning indication of the origins for subprime lending, however.
More importantly, of course, it’s from a big bank. The policy may not have been official, but it’s certainly one in the eye for Wall Street’s efforts to blame local mortgage lenders for the subprime mess.
This is Calculated Risks take on the memo: Calculated Risk: More On Chase and the Zippy Tricks Quote:
What I really got interested in was not where, exactly, this document came from, but why, precisely, it says what it says. I mean, you can see this as a Chase Account Executive (or whoever authored it) simply baldly encouraging fraudulent misrepresentation, and that of course is what it is. But you also have to see that it does appear to require some misrepresentation to get past Zippy in some respects. That much is to Chase's credit.
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This memo has been passed on to SEC officials.
Here is the actual memo from a now FIRED Chase employee: CHASE - zippy's cheats and tricks JPMorgan memo shows dirty tricks of mortgage trade | Reuters JPMorgan memo shows dirty tricks of mortgage trade Quote:
JPMorgan argues these were the wayward actions of a rogue employee who has since been fired, and by no means represent company policy.
"Clearly it's nothing that we condone," said Tom Kelly, a spokesman for JPMorgan Chase. "As soon as we learned about it, we stopped it."
Still, in the context of a broader housing debacle, the memo does provide some clues into just what lengths bankers went to push loans through the system.
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Were you sold a Zippy mortgage? Maybe this the ammo you need to fight back 