JPMorgan Has File Requests on About $8.1 Billion Loans
JPMorgan Has File Requests on About $8.1 Billion Loans
JB Reed/Bloomberg
Signage is displayed inside a Chase Bank branch in New York.
Signage is displayed inside a Chase Bank branch in New York. Photographer: JB Reed/Bloomberg
JPMorgan Chase & Co., the second- biggest U.S. bank by assets, received requests for files this year on about $8.1 billion in outstanding loans that may be candidates for buybacks.
Repurchase demands in the second and third quarter were “very high” and have increased over the previous several quarters, according to an investor presentation on the New York- based company’s website today.
JPMorgan received $2.9 billion in repurchase demands this year, compared with $3 billion for all of 2009 and $2 billion the year before, Charlie Scharf, chief executive officer for retail banking, said in a presentation at the BancAnalysts Association of Boston Conference. About 90 percent of the repurchase demands are for loans originated from 2006 through 2008, Scharf said.
Requests for loan files from private investors as well as government-sponsored companies Fannie Mae and Freddie Mac have increased, according to the presentation. The $8.1 billion in file requests this year compares with $9.2 billion for all of last year and $4.6 billion in 2008. The data exclude repurchase and loan file requests from private insurers.
JPMorgan has also separately stopped 127,000 foreclosures in 40 states, up from 115,000 disclosed last month, while it reviews those files to correct any errors in the documents, Scharf said. JPMorgan will begin re-filing paperwork in a few weeks, he said.
Refiling Process
“It’s going to take three or four months or so to get all these documents re-filed,” Scharf said. “It’s state by state. It’s not just the affidavits that have to be re-filed.”
He said the bank doesn’t yet know what the latest foreclosure problems will ultimately cost the company, which is in talks with state attorneys general investigating whether banks have improperly seized homes. “The delay itself could cost us up to a couple hundred million dollars a month or so just in additional work that has to get done,” Scharf said.
Attorneys general in all 50 states started a probe into foreclosure practices after court documents surfaced showing employees signed papers without ensuring their accuracy. Bank of America Corp. and Ally Financial Inc. were also among lenders that temporarily suspended some foreclosure sales or evictions, pending reviews.
A mortgage executive at JPMorgan said in a May 17 deposition that she signed thousands of affidavits and documents supporting the bank’s claims without personally checking loan records. The Chase Home Finance operation supervisor said she was among eight managers who together sign about 18,000 documents a month, according to a transcript of her sworn deposition provided by Tom Ice of Ice Legal PA.
JPMorgan was the third-largest U.S. servicer of home mortgages as of June 30, with $1.35 trillion or almost 13 percent of the market, according to industry newsletter Inside Mortgage Finance. Bank of America, Wells Fargo & Co., Citigroup Inc. and Ally Financial round out the top five.
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
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