JP Morgan CEO: Mortgage crisis has been costly

Written by Biloxi

Should we believe JP Morgan CEO Jamie Dimon's concerns on how much mortgages have cost banks? From 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….

“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.”

“We will do as many as we can. There is a lot of paperwork. The paperwork is different in every single state,” Dimon added, according to a transcript of the call.

“There were multiple checks and balances and there may be mistakes made in the foreclosure process, but they are very few and boy, when we find them, we try to make up for them right away,” the CEO said.

Certainly, the mortgage crisis and lawsuits against JP Morgan Chase are costing the bank big time. That is why Mr. Dimon tucked away $1.4 billion and more of his lunch money for litigation costs. On Friday, JP Morgan just released their 4th quarter earnings whicn their earnings continues to grow in the bad economy. JPMorgan Chase's income soared 47 percent as the bank set aside less money to cover bad loans. Mostly, the bank's earning come from the investment banking area. And this doesn't stop the bank from nickeling and diming their customers to make up lost revenue from the mortgage crisis. In February, JP Morgan Chase are hitting small dispositors with higher fees from their checking accounts.

According to American Banker, the bank blames the higher fees on regulators:

“We don’t want to raise fees on our customers,” a company spokesman said. “But unfortunately, regulation is forcing us to do it. And as a result, some customers may end up unbanked.”

And we know that is not true as the banks can raise fees on customers at anytime. Regulation has nothing to do with forcing the banks to increase fees. Although the incresed fees with hurt the poorest customers, I look for those customers to sign on the U.S. Treasury new program to give tax refund on a debit card. Those debit cards will be issued by the Treasury to the low income individuals who has no bank account and cashing checks at payloan stores.

So, do I believe Mr. Dimon's tears of his concerns on how much the mortgages have cost the banks? No. JP Morgan Chase's bottomline is pleasing the shareholders and profits.