JPMorgan CEO: Foreclosure probes may hurt housing

By James B. Kelleher

CHICAGO (BestGrowthStock) – JPMorgan Chief Executive Jamie Dimon said on Thursday he worries a widening probe into foreclosure practices could be a drag on the housing recovery.

“It may slow it down,” he said. “But we’re hoping it won’t kill it.”

Dimon made the comments after a press conference at the Chicago meeting of The Business Council, a group of 150 top U.S. CEOs that convenes several times a year to discuss issues facing the U.S. economy. Dimon is one of the group’s leaders.

Dimon at first declined to comment on the possibility the probe by 50 state attorneys general, one of the biggest investigations of the mortgage industry ever, might exacerbate the country’s three-year-old housing crisis. He initially told the press conference, “That’s not really pertinent to this meeting here.”

But he went on to talk about the state of the U.S. housing market, sketching a picture that was far from bleak.

“You can make a long list of negatives and positives about the economy,” he said. “Housing is obviously on the negative side. But prices have stabilized in a lot of markets around the country. Homes are being sold. Financing is being done. … There’s no wave of foreclosures coming. It’s a little tick up from where it is. … So it’s not good. But it’s actually modestly improving from a terrible state.”

At the conclusion of the press conference, Dimon approached Reuters and amplified on his initial response, saying he hoped the widening probe into foreclosure practices, which has thwarted some lender efforts to reclaim homes from delinquent borrowers, would only be a temporary blip that would not have a long-lasting effect on the housing market.

On Wednesday, JPMorgan Chase senior executives acknowledged the bank had identified “some issues” in its ongoing review of foreclosure affidavits, but said the bank remains confident that the repossessions were proper.

JPMorgan Chase, the second-largest U.S. bank by assets, is reviewing 115,000 mortgage affidavits, Chief Financial Officer Doug Braunstein said on Wednesday. The bank has so far found that some affidavits were not properly notarized.

U.S. banks — including JPMorgan — have suspended foreclosures in some states in recent weeks amid accusations from congressional leaders and consumer advocates that lenders cut corners foreclosing on thousands of homeowners.

Dimon said on Wednesday that the bank’s management was comfortable that serious issues will not be found, and any added costs from the review will be incremental.

(Reporting by James B. Kelleher; Additional reporting by Joe Rauch; Editing by Leslie Adler)

JPMorgan CEO: Foreclosure probes may hurt housing