JPMorgan Chase: Building Wealth Through Fraud

Chase mortgage memo pushes ‘Cheats & Tricks’

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo’s title says it all: “Zippy Cheats & Tricks.”

It is a primer on how to get risky mortgage loans approved by Zippy, Chase’s in-house automated loan underwriting system. The secret to approval? Inflate the borrowers’ income or otherwise falsify their loan application.

Their defense?

“This is not how we do things,” he said. “We continue to investigate” the memo, Kelly said. “That kind of document would neither be condoned or tolerated.”

And yet:

The Chase memo deals specifically with so-called stated-income asset loans, one of the most dangerous of the mortgage industry’s innovations of recent years. Known as “liar loans” in some circles because lenders made little effort to verify information in the borrowers’ loan application, they have defaulted in large number since the housing bust began in 2007.

Emphasis added by me.

It was an industry-wide innovation!

Again, JPMorgan Chase:

Chase no longer makes any stated-income loans, part of the bank’s efforts to tighten its loan underwriting, Kelly said. It wrote down $1.3 billion in nonperforming mortgages at the end of 2007.

Emphasis added by me.

Do they expect us to believe that one rogue employee brought in $1.3 billion worth of mortgages?

Explore posts in the same categories: C.O.A.T. - Money, C.O.A.T. - Scams, Depression 2.0

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