The layoffs came swiftly at JPMorgan Chase and Co. last week following the announcement that a much-maligned program meant to identify and compensate borrowers who were hurt by fraudulent foreclosures was being shut down.
But the heads rolling were not those belonging to the bank executives, corporation counselors or operations managers who helped run the program into the ground. Instead, according to an announcement posted to the New York State Department of Labor website, the bank began firing 529 of the employees who had been poring over individual foreclosure files from within a suite in downtown Brooklyn.
According to The Wall Street Journal, a further 310 employees were let go at a bank facility in Florence, S.C., due to the shuttering of the foreclosure review program.
“Fewer homeowners are falling behind on their mortgages so we need fewer employees to assist those who are struggling. We will work with affected employees to find opening at Chase or other local companies,” Amy Bonitatibus, a spokesperson for JPMorgan, told The Huffington Post.
Last Monday, JPMorgan, the nation’s largest bank, joined nine other financial institutions that had previously agreed to run an independent audit of foreclosures made in 2009 and 2010 in substituting that open-ended review for an $8.5 billion settlement.
JPMorgan’s portion of the settlement was nearly $2 billion, and $753 million of that amount will be cash payouts.
In interviews conducted by The Huffington Post with insiders within the independent foreclosure review process at various banks, JPMorgan has been singled out as a bank where procedures set up by internal managers stifled outside auditors and sabotaged the review process.
"It was like a badly-made ship designed to sink," an employee at independent auditor Deloitte, who reviewed JPMorgan Chase loans, said.
A source inside JPMorgan itself who was involved in the process of going through mortgage documents described some of the auditor procedures for determining if foreclosure fraud was committed as "impossible and a waste of time."
This story was updated with comment from JPMorgan