Wamu buyer admits bank contributed to housing collapse

In a letter to shareholders, JPMorgan’s chief executive admits that his bank contributed to the collapse of the American housing industry, but says that progress is being made to rectify the errors, HousingWire reported.

“We were one of the better actors in this situation – but not good enough,” Jamie Dimon wrote. “We made too many mistakes.”

Dimon told shareholders that his bank participated in the disaster by originating mortgages that wouldn’t have been given a decade earlier (“and won’t be given a decade later”). When delinquencies and foreclosures grew dramatically, his bank was “ill-prepared operationally to deal with the extraordinary volume of troubled mortgages and upset borrowers.”

Dimon said that JPMorgan, the company that acquired Washington Mutual in 2008, has 23,000 people servicing delinquent loans or dealing with foreclosures – up from 6,800 people in 2008.

“Our servicing operations left a lot to be desired,” Dimon wrote. “There were too many paperwork errors, including affidavits that were improperly signed because the signers did not have personal knowledge about what was in the affidavits but, instead, relied on the company’s processes. However, the information in the affidavits was largely accurate – i.e., the borrower, in fact, was in default, we did have the mortgage and so on.”