Bailed-Out Chase CEO Dimon: People Should Pay Mortgages "Even If They're Underwater"

Chase CEO Jamie Dimon, whose bank received $25 billion in bailout funds from the government, refused to tell CNBC anchor Melissa Francis how the bank is performing this quarter.

"Can you tell me how this quarter is doing for JPMorgan?" Francis asked.

Dimon's brief response: "I can't."

Last October, Dimon was a little more explicit on an earnings conference call:

"I would be shocked if we make lots of money one of these quarters, anyway." Dimon says they're watching investment-banking clients carefully.

Asked for his thoughts about Obama's housing plan, Dimon praised the plan, saying that it was "really elegantly done and really well-designed," adding that JPMorganChase alone will modify over 600,000 loans.

But he took a tough attitude towards home owners behind on their payments:

"I don't think just because someone's underwater they say I don't have to stay there. But they're supposed to pay the mortgage, and we should teach the American people, you're supposed to meet your obligations, not run from them. Because you have a mortgage doesn't mean you should run away as it goes down."

Click here for the video.

Comments

[DianeTreehugger]

Although lots of innocent (let's say naive) people got caught in this real estate mess, I really don't have any sympathy for the wide swaths of people who, when things were cookin', didn't mind boring everyone at a party about how much money they were making flipping houses, and who looked at a house (fundamentally incorrectly) as a liquid investment that headed only up,up,up. how many bubbles have to burst in how many faces before people realize that a house is, fundamentally, a place to live, and, if an investment, a long term one. It's only been in the last go-go 20 years or so that the average person thought of a house as a liquid, short-term investment. It's not, and lots of people are learning that hard lesson now. Carousel rides come to an end, people. Count yourself lucky if you didn't get caught.

[sposton]

I suggest reading the following piece from Village Voice:

http://www.villagevoice.com/content/printVersion/850296

Despite what they wish us to believe there is more to our crisis than sub-prime mortgages.

[globality]

If you didn'y buy your home as a short term investment and have 10 years (or more) you will see your home values appreciate again

I did not buy because I can count and I can read, and would rather not have my taxes go to bail out homeowners who where careless, but I prefer that to it going to wall street.

Talk about "between a rock and a hard place"

[clementukes]

What would you expect from the company that asked Mexico to kill off the Chiapas rebels so NAFTA could be approved. People involved in making money with money don't contribute to society. Just a scourge. There should be at least one major nationalized bank with pro-consum­er/citizen rates, fees, etc. Then commercial banks would have to compete with the model of a consumer first institution. Otherwise, we end up with collusion and large benefits for a handful of individuals and large, but diffused costs spread over an entire nation of consumers who are too busy working hard to take up battles with these places. We live surrounded by BS and the beneficiaries act as if it's the only way things can or should be. And, until we force change..they're right.

[DomainDiva]

People involved in making money don't contribute to society?

Answer this:

Has a poor man ever given anyone a job?
Does a person who goes to work, pays his bills, raises his children and makes money contribute to society?

I am proud to be able to make money. and believe me I know I am contributing to society.

[gemzenith]

I am all those things, but yet I'm still one of the working poor.It would be nice to have a living wage.It would be nice not to have the wolf at my door.I make less than $25,000 and my ex doesn't pay child support since he lost his job.I'm not going to be a jerk and dun him for $ now,but I still have to raise my sons.My life is modest and our one big thing is this computer which replaced a tv and cable.At least I can have a voice here instead of being placated with the drivel that they call "programming"

[clementukes]

I didn't say people involved in making money. I said people involved in making money WITH money. They created a false economy, exorbitant wealth created out of nothing, nothing at all, and those who did not benefit are stuck with the bill both in terms of our tax dollars which are bailing them out and the inflation created by having to print money to cover a deficit we really can't afford. I'm not against money, it's merely a representation of value. Pol Pot tried a moneyless society. It doesn't work. I'm just against greed. Now, you can't put a price tag on your kids, but bankers certainly put one on their future. A nice Zero. Good luck trying to send them to a university, providing them with healthcare and adequate shelter in an economy that has to tend to the rich because they're "too big to fail!" Your kids aren't too big to fail in this country, but even without knowing them or you, I hope the best..

[chayefsky]

I am apoplectic! This greedy, arrogant monster has the nerve to lecture the very taxpayers who have been forced to bail out his bank , a bank that has been miserable mannages and one that has no problem charging usurious interest rates and raising those rates on a whim! Bring back Mme. Guillotine!

[PS9]

He's actually one of the good guys. Big time democrat. Obama consulted him on the economic stimulus plan. JPM didn't ask for TARP money, it was asked to take it.

You should also listen to the interview. Dimon is clearly in favor of the plan. Here is a simple and of what he is getting at:

1. Suppose a homeowner takes out $200 thousand mortgage on a condo that costs $220 thousand.
2. The value of the home declines to $180 thousand.
3. The mortgage holder has plenty of money in the bank and is still employed.
4. The home owner would be financially better off if he walked away (bad credit rating notwithstanding).
4. Economically, all home owners in the general region and the country as a whole are better off if the homeowner continues to pay the mortgage. There will also be more money for JPM to restructure more needy mortgage holders.

That's all Dimon is saying. Why are you so indignant? If you don't get that example, multiply all the numbers by 100 and assume the example represents a Wall Street worker who would be better off financially by walking away from his or her obligation even though payments could be made.

That is exactly what Dimon is saying. Very simple. If people can make their payments they should. The bank is restructuring one million mortgages but couldn't if every mortgage holder who was under water walked away.

Sounds very logical.

[RenePA]

Logical. Sure, that sounds good. Especially when "logic" equates millions in CEO/Executive bonuses.

But really, what logic on earth makes anyone think that the majority of "hard working Americans" want to walk away from their mortgages? These people should NOT be at issue but they are. Why? Because other types of Americans - those who bought into the Flip-It Make A Buck, We Do It So Can You mentality did, indeed, buy it.

Wall Street makes money off of shleps who trust the bogus philosophies that Wall Street, Politics, and Religion keep feeding them.

It's obscene.

[dadw5boys]

JPM CHASE cheating people with ghost accounts they never send a crad for to limit people credit.

Chase allowing all kinds of Credit Insurance Companys to bill their customers cards and making it hard to get the charges taken off. But Chase has added the interest and that never comes off.

JPM CHASE = INTEREST ON INTEREST ON INTEREST ON INTEREST.

[stargazer13]

I do believe this man should resign

when you are a CEO of a bank that is considered to big to fail and then your bank fail,s

well that would indicate to me that it,s too big a job for you to handle

. and from now on banks are going on my list of ( NO DO GOOBERS )

sorry after long meeting,s into the wee hours of many night,s

fraught with worry and uncertainty. over the years of my adult life I have sadly come to the conclusion

that you the Bank deserve not my trust respect or use of my money .

Thank You sincerely JOHN & JANE public

[nomadicexpat]

i do believe you do not know what you are talking about

JPM has not failed, it has hit a bump in the road but it is weathering that thanks to good management. it had profits of $5.6bn for 2008, i would not call that failure nor cause for the populous to rally with pitchforks

it took tarp money, it was required to by the bush administration

[RRoadrunner]

If a person can afford to pay their mortgage, but want to stimulus funds because the house is not worth what they paid for it should they get help from the federal government?

My answer is NO. Unfortunately many think they should. This is the biggest problem with the SB and may be what this over paid robber barren was trying to say.

[RenePA]

For those who feel it necessary to ignore the glaring hypocrisy of this man and point out that he, oh, so generously waived his bonus, here's a couple of facts for you:

Dimon's total compensation in 2006 was $41.2 MILLION, in 2005 he collected over $22 MILLION. He is on Forbes list of 400 Richest Americans (holding a respectable #281 out of the 400) by having a net worth of 1.7 BILLION. That's BILLION with a B.

Of COURSE he wants to lecture Americans on doing their duty and paying their mortgages! How else do you think he will make his millions NEXT year?

In the meantime, the company he runs can up customer card card interest rates to insane amounts... (29.99% sound familiar to anyone here?), use subsidaries to hand out mortgage deals that should be illegal, and stalwartly refuse to compromise in any way with the millions of people who are losing their homes.

How much would anyone like to bet that Chase and the other bloodsuckers out there are heavily exploring investments in multi-family unit blocks of property? Because apartments are going to be where everyone lives very soon.

[Oxonian2001]

Dimon: "Because you have a mortgage doesn't mean you should run away as it goes down."

What about "Because you have a bailout and bonus doesn't mean you should run away as it goes down."

More Ivy greed and upper middle class arrogance. The problem of course lies in the fact that the vast majority of the occupants in the White House, Congress, and Senate have never taught these folks a proper lesson since they're all drawn from the same stagnant pool of entitled miscreants. This is why 99% of America will continue to be RIPPED OFF.

[AMERIKA]

There is a consistent moral equivalence of the elite on the right. It very simply says "do what I say, not what I do". The corollary theorem is " one set of rules for you and one set for me". The complementary theorem is "rich people should no pay taxes", and the ultimate unifying theory is "Small government and deregulation until I need a bailout."

My view is that even as a progressive, I believe in conservative principles, such as, if you go bankrupt, you should declare bankruptcy and reorganize. That if you have debt, you should pay it, that if you cannot afford the risk you should not take the risk..Oh and this applies to the banks too.

[skymuffin]

I refinanced last year before the sky fell. The mortgage has been sold two times since then and, suddenly, this bozo's company holds my note. Gad, get him OUT!

[Happylib]

Let me say if I have this "conservative principle" correct....I should repay any obligation because it is morally correct even if it makes no business sense and harms my future but Big Business should drop off toxic debt at the govt doorstep because it is morally ok for them to avoid paying the obligations they agreed to? Also, can we start calling these guys "Welfare Kings?" I mean get real, these people are getting more in one fail swoop than the Reagan "welfare queens" would see in 1000 lifetimes living as a Vanderbilt. I swear to all who read these words that I will fight until my last breath to keep Republicans as far away from American govt as humanly possible. They are disgusting.....they are despicable...they are inhuman. They can all go straight to H E double hockey sticks!!!!

[skymuffin]

So, if you dig us into a hole so deep that the WHOLE WORLD is spiraling down and no one knows when it's going to end...you get to lecture US on personal fiscal responsibility?

Why is he still talking? Shouldn't he be in jail or at least be barred from holding an executive position in any company for life?

[shivadas]

Give us back our 25 billion a$$h**e

[djgonebad]

I wonder if "THEY" could swim, in choppy waters, with weights around their ankles?