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Rabbi Shmuley Boteach Headshot

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.