JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.
J.P. Morgan Chase acknowledged that employees signed off on thousands of foreclosure documents without really reading them. This was in response to a sworn statement by a Chase employee that her team signed off on 18,000 foreclosures a month without proper document review. The firm just froze the foreclosure of 56,000 homes until their documents are re-examined.
Chase is not alone. An Ally Financial document processor admitted signing off on 10,000 foreclosures a month without reading the paperwork. “That’s barely a minute per case,” notes the Washington Post‘s Brady Dennis, “assuming he works a normal eight-hour day.”
Instead of oversight, banks have “robo-signers.” Still believe that financial institutions can regulate themselves?
Update: “Robo-Signing: Documents Show Citi and Wells Also Committed Foreclosure Fraud,” Abigail Field, AOL Daily Finance.
Image (“American Dream, after Grant Wood”) by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com
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