Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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William A. Roper, Jr.
In an indication that JPMorgan Chase has finally come to understand and appreciate the scale and dimensions of the criminal activity conducted by its mortgage banking operations, the former head of JPMorgan Chase Home Lending is getting the boot.  Of course, he is merely taking "much needed time off".  The story appears within HousingWire:

"Former mortgage chief leaves JPMorgan Chase" (June 14, 2011)

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William A. Roper, Jr.
The story is also up at the Wall Street Journal:

WSJ: "J.P. Morgan Shuffles Ranks", by David Benoit (June 14, 2011) [subscription $$]


I particularly liked this succinct explanation in the WSJ treatment:

In the memo Tuesday, Mr. Bisignano said he and Mr. Lowman made the decision and that Mr. Lowman will "take some much needed time off."  Mr. Bisignano also thanked Mr. Lowman for workings "during extraordinary times" and wished him well.


Attempts to reach Mr. Lowman weren't immediately successful, and a person who answered the phone at his office said he was no longer with the company.

But of course, the departure was NOT abrupt!

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There seems to be a slightly different spin in the story at Bloomberg:

JPMorgan Reassigns Retail Chief Charles Scharf to Private-Equity Banking
Earlier today, the company ousted mortgage chief David Lowman after it overcharged active-duty military personnel on loans and improperly foreclosed on other borrowers.

Personally, I think Dimon just needed a sacrificial lamb so it looks like he is doing something productive.

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William A. Roper, Jr.
Susan said:
Personally, I think Dimon just needed a sacrificial lamb so it looks like he is doing something productive. 


In a company the size of JPMorgan Chase, delegation of businesss units like mortgage banking would be pretty complete.  Dimon wouldn't have been involved in the day to day management of the mortgage banking division.

The fact that all of the major banks continued to give the same nonsensical DENIALS and to assert that the robo-forgery and robo-perjury were just minor paperwork issues reflected the fact that the very most senior executives remained IN DENIAL about just HOW BAD the fraud and criminality really was.

Only within the last sixty to ninety days have we seen an indication that senior management was putting NEW PEOPLE IN CHARGE of some of the mortgage banking operations.  It seems to me almost certain that these new people were expressly told to ascertain quickly whether senior managers in mortgage banking had been giving corporate management accurate and truthful information about the scale and nature of the problems.

When it became apparent just how serious the problems were and how much these executives had been MISLEADING top management and the Board heads were sure to roll!

I serious DOUBT that Jamie DIMON KNEW the dimensions of the criminality at his bank.

Of course, he should still be FIRED for his egregious failure to properly supervise and for creating a climate where such epic criminality could have flourished!
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Amazing, again I must agree with Roper.
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Yes, you are no doubt right.
My editorial comment stemmed more from emotion than logic!
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William A. Roper, Jr.
Incidentally, Susan, I probably should have gone over and read the Bloomberg piece before responding to your quote above.

The reassignment of Charles Sharf, who had previously overseen the mortgage operation as a part of the executive team had been less the focus of the original stories I saw.  Sharf certainly should have been canned, too, but again more for his supervisory failing than his direct complicity in the criminal activities within the mortgage unit.

Dimon has rather clearly demarcated WHERE is assigning blame.  Those downsream from Sharf are being held responsible.  Close friend and colleague Sharf is rewarded with another different assignment.

Firing Lowman was clearly very important though.  No doubt Lowman has been protecting his subordinates throughout and minimizing the significance of the systemic fraud in the mortgage enterprise.

And the spin that somehow the Servicemembers' Civil Relief Act violations and mistreatment of soldiers is the reason is utter nonsense.  While those violations were certainly embarassing to JPMorgan Chase, they don't even add up to a tenth of a cent on the dollar of JPMorgan Chase earnings.

Nor is the hit to Chase's reputation the issue.

The mistreatment of the service members is the convenient alibi of the publicly understood problems.  Senior management is probably now beginning to perceive just how collosal the mistakes and criminality was and how expensive the the fraud is going to ultimately be.  THEY ARE STILL IN DENIAL AND ARE STILL MINIMIZING THE COST AND SIGNIFICANCE, BUT HAVE NOW ASSIGNED EXECUTIVE BLAME AND ARE BEGINNING TO ASSESS THE REAL DAMAGE.
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