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Mortgage Ignominy at JP Morgan Chase

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In the heart of New York City, if you listen closely, you'll hear a severe sucking sound, as if some magical and invisible vortex is pulling in all that surrounds it. Amazingly, it doesn't swallow up your scarf, your briefcase, or muss you hair. It does, however, pluck every last dollar and cent from your wallet. It is an insatiable behemoth whose hunger can never be stilled. Shove hundreds of billions of dollars in the chasm and still it aches for more.

Welcome to Wall Street, whose bankers, after nearly collapsing the global economy, have learned nothing from their greed and who have become more voracious than ever. Matt Taibbi of Rolling Stone coined last year's most memorable journalistic phrase when he described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." But when it comes to screwing the American tax payer out of funds designed to alleviate his mortgage burden, JP Morgan Chase emerges as the great celestial black hole, sucking in every last particle of cash before it devours your very home into eternal foreclosure darkness.

In 2008 JP Morgan Chase was given, according to CNN, $25 billion dollars in bailout money which was, along with Citigroup and Wells Fargo, 'the largest amount given to any bank.' In addition, the New York Times, in a story entitled, "Billions to Fight Foreclosure, but Few New Loans," reported that JP Morgan Chase also participated in an Obama program begun ten months ago that distributed $75 billion in order to keep four million Americans in their homes 'by persuading the banks to renegotiate their mortgages.' But of one million applications filed, only 31,000 have thus far been converted to new mortgages. In New York City, lenders have offered new or trial mortgages to only three percent of those who sought relief.

That's a lot of taxpayer cash that seems to have facilitated JP Morgan Chase and others paying billions in bonuses its bankers while preventing even meager morsels from falling to those most in need.

How badly does JP Morgan Chase fail at helping those whom the government's money was meant to assist? Take just one story, reported by the New York Times on January 2, 2010. JP Morgan Chase acquired Washington Mutual, who owned the mortgage of one Jaime Smith of Lakeland, Florida. After giving her a trial adjustment that lowered her mortgage by all of $200 per month, Smith made every payment on time and submitted all required documents. She was therefore shocked to tears when she received a legal notice a few weeks later telling her that Chase has foreclosed on her home and sold it at auction for $100. The story gets only better. Who bought the house? Why, JP Morgan Chase, of course.

Amid the appalling nature of JP Morgan Chase's behavior toward her, Smith should at least be happy she ever got through to a live person at the bank who actually agreed to a modification. Most applicants are not nearly so lucky. As the Times wrote, "the lenders toss up daunting hurdles. Homeowners say they send and resend thick piles of documentation, only to be told that their papers have been misplaced, or that their pay stubs are out of date. Housing counselors dial a dozen times just to get a servicer on the phone... 'It's a constant Catch‐22: They never give you their name,' said Gerald Carter, a counselor with the Parodneck Foundation in New York City, which receives city and state money to advise homeowners. 'You call back and say, 'No, I was talking to Bob last time,' but Bob wouldn't give his last name -- not even an employee ID number. So you start over.'"

I have, unfortunately, had my own experience with JP Morgan Chase that mirrors this exactly. I was born in Los Angeles and moved, as a boy, to Miami Beach in the wake of my parents' divorce because there my mother had the support of her parents and brother. That's where my siblings and I were raised and where my mother, brothers, sisters, nephews and nieces all still live. My wife and I always spoke of making Miami our permanent home where we could be close to family. Thus, in April 2006, while living in our New Jersey home where my radio and media commitments necessitated I reside, we realized our dream of purchasing a house in Miami Beach on the same block as my brother. Our kids were in Jewish day schools and one was in a special educational program, and we decided to delay our move until we could find a program that matched. In the meantime, we rented out our new home, receiving in rent only half the costs of the high mortgage but never defaulting on a single payment.

By the middle of June 2009, having lost our tenant and with the economic downturn hitting especially hard, we sought a mortgage modification to make the home affordable. The home had already lost half its value. But interest rates had shrunk substantially to almost nothing, JP Morgan Chase had been given a massive bailout to assist homeowners, and we assumed it would be relatively easy to refinance and that the bank, which had received so much assistance from the American taxpayer, would welcome making our lives a touch easier in these very difficult times. Surely JP Morgan Chase would be happy to modify the loan since they were now borrowing money at significantly lower rates than before and they could still make a hefty profit even after the modification. How wrong we were. We quickly discovered that it was impossible even to get through to a living person or leave a message for them to call back. For five months we placed phone call after phone call but could not reach one person who would help us. When we did finally encounter a live human voice, we were told to send in reams of paper, which we did on numerous occasions, only to be told a few weeks later that the documents had been lost or never arrived. We finally hired a lawyer who sent the documents in multiple times. Still, JP Morgan Chase told us that they did not find our documents.

Let me be clear that I never believed in the bailouts, not for we regular people and certainly not for billionaire bankers. Capitalism is going to have winners and losers and the latter, however painful, must sometimes take lumps. But what is so grossly unjust is that, having received billions of dollars to bail out regular taxpayers, banks like JP Morgan Chase decided to use the money to bail out themselves, paid billions more in bonuses, and are loath to help the very same taxpayers that rescued them. These banks are also now borrowing money at miniscule rates but refuse to alter the mortgages of those who are still stuck in very high payments. There is something cruel about a system that bails out multi‐millionaires but not average citizens who struggle to make ends meet.

As a way of illustrating the obstructive nature of the bank, I took notes on a single December 2009 day of trying to get through to speak to someone at the bank. First I called the number of a written notice sent to us about our mortgage and was put on a long hold. I finally got through to Bob, who would not give his last name or employee ID number. He only said he was in Texas and could not help me because I had to speak to 'The Imminent Default Department.' He said he would transfer me and immediately cut me off. He made no effort to call me back although the first thing I did was give him my callback number. Having found the number for the department myself, I called and was put on hold for one hour and forty minutes. Andrea H from Jacksonville, Florida, who refused to give her last name and employee ID, immediately told me that I had to call Bob's department back because she could not help me and I had been misinformed. I protested that I had just held on for the longest time and that Bob had told me her department would help me. Without so much as a word, she promptly hung up.

Calling Bob's number back I got through to Melissa T, who finally, after much pressure, gave her employee ID number. She agreed to look up my file. Predictably, a few minutes later she told me my documents were incomplete and I had to submit them again. I told her the name and number of my lawyer who could confirm that we had sent the documents in multiple times. She promptly hung up.

Finally, in desperation I called the main number of JP Morgan Chase in NY and asked for the CEO, Jamie Dimon. I was transferred to Rosa Alderete in Texas who told me there was no direct number for the CEO's office, which is curious since the bank is a public corporation. What was he hiding from? Could it be the nearly $20 million he took in total 2008 compensation (he smartly relinquished a monetary bonus, but more than made up for it by taking $17 million in stock awards), the year Wall Street brought America to its knees?

I began to describe the hellish experiences I had had with her bank and demanded to speak to a supervisor. Refusing to take no for an answer, I was put through to Heather McLendon, a customer care analyst with the executive office. Only this time, I mentioned that I work in media and planned to write about my experiences. I was immediately transferred to her supervisor, Emma Huggins, in Florence, North Carolina.

While on the phone my other office suddenly line rang with Michael Fusco of JP Morgan Chase's press office telling me he would help me get answers. Surprise! Mentioning the media made me finally appear on the bank's radar. Mr. Fusco, who has alone acted like a gentleman, later sent me the following statement: "We apologize for the delay and are continuing to add staff and invest in technology to better serve our customers. In 2009 alone, we hired 5,300 additional mortgage employees to handle the unprecedented volume generated by the troubled economy and housing market. This year, we offered more than 568,000 mortgage modifications to struggling homeowners, including 83,000 modifications that have already become permanent."

It sounded nice but was belied by my and so many others' experience. I thought to myself that if I, who work in media and could thereby at least publicly expose some of their practices, could make absolutely no headway against a bank seemingly intent on obstructing any and all refinancing attempts in their desire to take my home, what chance does the average American, whose government has given this bank tens of billions of dollars to assist them with easing their mortgages, have in getting any relief? Apparently none. JP Morgan Chase is too busy paying their executives billions of dollars, all of which were facilitated by assistance they received from the taxes of hard‐working Americans who were going to lose their homes so that these guys could buy a new Ferrari.

It amazes me that there's so little public outrage. Sure, there is plenty of grumbling over the water cooler, but few of these financial giants have been publicly challenged. In addition to everything else mentioned, the government actually pays these banks $1000 for each loan modified. And still they refuse to extend relief, even as they give their employees colossal bonuses.

This past June I published an article about why I was forced to file a lawsuit against Bear Stearns, another JP Morgan Chase subsidiary, the investment bank that had looked after my pension plan for many years as it rapidly deteriorated and as I was given barely any time by its chairman and my portfolio manager, Ace Greenberg. When in the course of 2008, the investment dwindled by about 40 percent and I still was given barely any time to discuss my dwindling investments with Greenberg, I decided I had to make a switch. I soon discovered that my new portfolio manager at Bear did his utmost to squeeze every last fee out of me, even as he handed the bulk of my investments over to mutual funds who charged their own fees to manage what he claimed to be doing for me.

You might have thought that a bank whose gambling addiction and insatiable appetite for money brought it to the brink of bankruptcy and ended up being sold for what was initially $2 a share would have learned a lesson. But no.

Aside from everything I detailed above, I called the office of CEO Jamie Dimon on multiple occasions and sent him a personal letter hoping to get just one of his lieutenants or secretaries to call me back. Not until I mentioned that I had a media platform was I deemed worthy of attention.

Don't get me wrong. Capitalism works and Wall Street has many people of high integrity and sterling reputations for honesty and philanthropy. But where, overall, is the gratitude? At least George Soros was honest enough to say that the billions of dollars of bank bonuses being paid out this year were all gifts from the government, without which so many of these banks would not even be around. Is it too much to ask that these millionaires share just a few of their government‐granted crumbs with the millions of people fighting to keep their homes?

Wall Street needs a dramatic overhaul and it is for the Obama Administration, first and foremost, to demand change and reform. Using the term 'fat‐cats' is not enough. We don't need name‐calling but real action. But a President who allows the heads of Goldman Sacks, Citigroup, and Morgan Stanley to disrespect him by missing a meeting (they cited fog) to which they were summoned - when they could easily have gotten into a car or train and shown the elected leader of the American people that they take him seriously - is demonstrating a kids‐glove approach that is weak and ineffective. President Obama may be the leader of the free world but he seems to be in awe of these masters of the universe.

The toothlessness of the Obama approach is best captured in the quote Phillis Caldwell, chief of the Treasury Department's Home Ownership Preservation Office and who oversees the Obama mortgage modification plan, gave to the New York Times after being asked about a lender who refused to modify customers' mortgages. "If it is reported in The New York Times and someone chooses to audit it, that's important," she said. So she punted responsibility for enforcing compliance to the media. It seems as though even the Obama Administration concedes that only the shame of the press, rather than the integrity of the process or the enforcement of government, will work to bring change to the great vacuum in the heart of New York City.

Rabbi Shmuley Boteach, a relationships counselor, writer, and broadcaster is the author of many books, his most recent being, "The Blessing of Enough: Rejecting Material Greed, Embracing Spiritual Hunger." Find him on the web Shmuley.com and follow him on Twitter @RabbiShmuley.