Dimon Threatens Obama: Investigate and Lose Settlement

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Editor’s Comment: If there was any doubt in your mind about who thinks they run the government, it was dispelled yesterday when Reuters reported that Jamie Dimon, CEO of JPMorgan Chase warned Obama that if the new investigation team actually does anything, there won’t be any settlement.

The sheer arrogance of a possible criminal demanding that the government stop investigating him or else the too big too fail bank won’t participate in settlement talks is unfathomable. It demands a response from Obama and it demands a re-thinking at the White House about its relationships with the big banks.

The real investigations are just getting started, with considerable support from already published instances of robo-signing, surrogate signing, forgery, fabrication and fraud in the foreclosure process.

Dimon reacted because of one major risk: the entire securitization scheme will be revealed as a scam from beginning to end. This would mean that the banks would have enormous liability to virtually all MBS investors, enormous tax liability for the REMICs and potentially to the investors, and enormous liability to homeowners who were duped into thinking that they had been through conventional loan underwriting when in fact it was jsut a marketing scheme to justify the movement of money.

As stated on these pages before, the result will be

• (1) that investors, as creditors in these transactions are owed 100 cents on the dollar not by the homeowners, but by the Banks, who took investor money and either didn’t invest it all in loans, or invested in loans that they knew ( and were betting on) would fail
  
• (2) that potentially trillions of dollars in unreported income went untaxed amounting more than any bailout
  
• (3) that the mortgage documentation was so defective as to defy reformation or correction, leaving the loans unsecured and possibly non-existent and
  
• (4) that the homeowners who have been foreclosed and dispossessed still own their properties with an unclear debt or obligation that is unsecured.

Dimon is trying to block reality from entering into the picture. Selling the loans multiple times through exotic instruments that looked like hedge products has its consequences. It leaves the creditor or its agents filled with money obtained through multiple payments on the same debt. All this seems counter-intuitive, I know. And it sure puts a crimp on the foreclosure plan that takes homes to satisfy a debt that has already been satisfied multiple times.

Beyond that, it provides a blueprint for correcting the corruption of the title registries across the country. Once the loans are shown to be defective beyond recognition, and once securitization is shown to be a word and a plan that was never actually executed, the whole thing boils down to one simple fact: there were loans but there were no mortgages. Papers was signed that meant nothing, disclosed nothing and violated every industry practice in place for hundreds of years.

There is no greater fiscal stimulus to the economy than returning ill-gotten gains to the investors and homeowners who were victims of this scheme. It will save pensions and allow people to recover the wealth that was siphoned out of the economy instead of the job Wall Street was meant to fulfill — pumping liquidity into the economy for expansion, innovation and prosperity. The answer is right there in front of us. The Banks have attempted to place false ideology in front of the requirements of law. The only question is whether the government will let that happen.

See Full Story on Reuters

JPMorgan Chase & Co Chief Executive Jamie Dimon said President Barack Obama’s decision to expand investigations into home lending and sales of mortgage securities could stop settlement talks with the states over foreclosure practices.

“It has a pretty good chance of derailing it,” Dimon said in a televised interview with CNBC from Davos, Switzerland on Thursday.

Obama, in his State of the Union address Tuesday, said he has asked his attorney general to create a special unit of prosecutors to expand investigations into home lending and packaging of mortgage-backed securities. It is not clear how the new unit will be different from earlier investigations.

JPMorgan is the largest U.S. bank and one of the larger servicers of mortgage loans. JPMorgan, Bank of America, Wells Fargo & Co, Citigroup and Ally Financial Inc have been in talks with state attorneys general for months about settling allegations of foreclosure abuses.

The banks and states have been discussing a plan that would have the banks pay $25 billion to homeowners through reductions in principal on mortgage loans.

“I think it would be better for America if that settlement took place,” Dimon said. “If this thing derails that, so be it.”

(Reporting by David Henry; editing by John Wallace)

Tags: bankruptcy, borrower, countrywide, Dimon, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, JPMorgan Chase, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
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