Mr. Dimon, you said that if you could do things differently, you would never be in default servicing again and would tell anyone who took out a mortgage with Chase that if they are 60 days late, you would sell their mortgage and would not want to do business with them anymore. On behalf of borrowers nationwide, Mr. Dimon, the feeling is mutual.
If we fall behind on a mortgage, we don't want Chase as our servicer and don't want to do business with you, either; however, borrowers have little choice over who owns or services their mortgages. So, please, please, please make good on your threat and sell Chase's delinquent mortgages. American Homeowner Preservation ("AHP") would welcome Chase's borrowers, but even if you sell to someone else, odds are that borrowers will be treated better elsewhere.
Really, the same goes for Bank of America, Wells Fargo, Citi and the other big banks, which have typically proven impotent at providing sustainable solutions to at-risk borrowers. They should all divest themselves of these troubled loans in hopes that the purchasers will be more accommodating to borrowers.
Around the time that your bank and several other banks settled with regulators to pay out around $8.5 billion to homeowners which you and other banks had foreclosed upon illegally, you stated that you didn't think there have been cases where people had been evicted out of homes when they shouldn't have been. Further, you've said that foreclosure is really giving debt relief to people that really need it, therefore arguing that banks taking people's houses and kicking them onto the streets, is, in fact, a good thing for people ruined by debt.
Sadly, this trend continues to be a reality for many. Although new foreclosures overall across the nation have declined, 14 states actually saw foreclosure starts increase in February.
One of the biggest challenges AHP faces is trying to win over the trust of individuals who have been failed by the financial system and preyed upon by those who wish to benefit from their misfortune. These mortgage customers are the individuals who have long been considered the backbone of our country.
These people are the faces behind the numbers of the rapidly widening wealth disparity in America. The rate of long-term joblessness is greater than it's been in any recession since The Great Depression. Although the majority of AHP's constituents still have jobs, they are feeling the pinch of declining incomes and increasing costs of living.
Being "accommodating" to borrowers does not mean letting borrowers live for free. Borrowers may not be paying their mortgages, but chances are they are paying attorneys each month to fend off banks' foreclosure efforts in hopes that the delays will eventually bring the banks to the table to provide modifications or other viable solutions. No family wants the uncertainty of a looming foreclosure, and all would prefer to stop paying the attorneys and resume paying affordable mortgage payments.
So, let's step out of the boxing ring and sit down at the scorer's table to try to use our heads rather than our fists. If you can't do that, then free these borrowers by selling their mortgages.
-- Jorge Newbery
Jorge Newbery is Founder and CEO of American Homeowner Preservation, which purchases pools of distressed mortgages from banks at discounts, and then offers sustainable solutions for homeowners to stay in their homes.