Foreclosure process a ‘mess,’ J.P. Morgan CEO says – MarketWatch

SAN FRANCISCO (MarketWatch) — J.P. Morgan Chase & Co. Chief Executive Jamie Dimon said Friday that the foreclosure process is a “mess” that’s cost the financial-services giant a lot of money.

Dimon also said litigation over troubled mortgage securities is “going to be a long, ugly mess,” but won’t be “life-threatening” for J.P. Morgan.

J.P. Morgan reported better-than-expected fourth-quarter profit on Friday, partly helped by lower loan-loss provisions as nonperforming assets decline. See story on the bank’s earnings here.

However, the lingering effects of the housing bust are still rippling through the banking sector.

Last year, a controversy erupted over so-called robo-signers, who are employees of mortgage lenders or servicers who sign affidavits supporting foreclosures that have to be cleared by judges in many states.

With so many foreclosures to process, there’s concern that such affidavits are signed without verifying whether loan documents and other records have the correct information. The integrity of the process is a key component in how judges in some states decide that people’s houses can be taken and given back to the bank.

The controversy led to big banks halting foreclosures for several months. This has slowed down efforts to deal with the mountain of trouble mortgages that are still out there. It’s also sparked concern that banks will have to spend more money getting distressed properties through the foreclosure process.

“It is a big mess, it has cost us a lot of money,” Dimon said Friday during a conference call with analysts. “Unfortunately, the only way to do it right is name by name by name.”

via Foreclosure process a ‘mess,’ J.P. Morgan CEO Says.

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