So many shameful acts, so little time...
2008-03-27: Zippy Cheats & Tricks (Calculated Risk)
2008-04-01: JPMorgan memo shows dirty tricks of mortgage trade
NEW YORK (Reuters) — An internal JPMorgan Chase (JPM) memo titled "Zippy Cheats & Tricks" offers a peek into just the sort of dubious lending tactics that underpinned the housing market's deepening downward spiral.
Originally obtained by reporters at The Oregonian newspaper, which published a story Thursday, the memo offers step-by-step instructions on how to beef up mortgage applicants' stated incomes in order to help them qualify for home loans.
1. Make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus.
2. If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds.
3. If you do not get (the desired results), try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets."
JPMorgan says that these were the wayward actions of a rogue employee who has since been fired, and by no means represent company policy.
"Clearly it's nothing that we condone," said Tom Kelly, a spokesman for JPMorgan Chase. "As soon as we learned about it, we stopped it."
Still, in the context of a broader housing debacle, the memo does provide some clues into just what lengths bankers went to push loans through the system.
Over the past six months, rising defaults on home loans have not only battered the mortgage sector, threatening recession, but also sent the banking industry into a tailspin.
Many large banks repackaged mortgages and held them on their balance sheets as complex derivatives securities, essentially bonds backed by other types of loans.
These developments have many politicians in Washington, including Democratic presidential hopefuls Hillary Clinton and Barack Obama, calling for greater regulatory oversight.
The conclusion of the JPMorgan memo, written in bright purple letters, certainly hints at a credit system gone awry: "It's super easy! Give it a try!" it reads. "If you get stuck, call me ... I am happy to help!"
2008-08-12: JPMorgan has $1.5 bln in Q3 mortgage asset losses
WASHINGTON (Reuters) - JPMorgan Chase & Co (NYSE:JPM - News) said it has racked up $1.5 billion of losses so far this quarter on mortgage-linked assets, reflecting deepening turmoil in credit markets.
Shares of the third-largest U.S. bank by assets fell 9.5 percent, as investors grew increasingly disappointed with a bank that had largely sidestepped the worst of the credit crunch, and analysts cut their profit estimates.