Word that the government had reached a $13 billion settlement with financial giant JPMorgan Chase, for the role its acquired firm, Bear Stearns, played in the 2008 financial crisis, sent media pundits into a frenzy.
Rather than welcoming the idea that a large bank would be held accountable for actions that played a prominent role in leading millions of Americans to lose their homes and spiral into financial ruin, some television analysts were decrying the settlement as a “shakedown,” a “witch hunt,” a “scalping,” and even a “jihad.”
Our Miami foreclosure defense lawyers are appalled that those with such a prominent platform would suggest that the responsible thing to do would be to once again pass the buck. Thankfully, we aren’t the only ones who hold that belief.
Jon Stewart, host of “The Daily Show,” recently took to slamming several members of the media for holding such a misleading stance.
Where some had suggested that JPMorgan shouldn’t be held accountable due to the fact that no one currently working there was involved in Bear Stearns’ mortgage fraud, Stewart was quick to point out that liability is acquired any time one business buys another. This very point was even made to media members by former JPMorgan CEO Jamie Dimon at the time of the Bear Stearns purchase.
Prior to the 2008 financial crisis, many large banks were in the business of mortgage securitization. Essentially, they took home loans that were made by retail banks and mortgage brokers, bundle them and sell them to investors. Government-backed mortgage finance firms Freddie Mac and Fannie Mae bought a portion of those mortgages.
The problem is that many, many of those loans were bad. They were subprime, which means that people who had bad credit, small down payments or both were sold loans on homes that they couldn’t afford. Banks sidestepped many quality control procedures in order to push these bad loans through. Not only that, but the value of those homes were often over-inflated.
Bear Stearns was one of the top five banks in the business of packaging and re-selling mortgage-backed securities. JPMorgan Chase bought them, thereby assuming that liability, though it wasn’t known at the time. (Plus, JPMorgan was engaging in some of these activities on its own too.)
While many of the pundits decried the “huge” and “incredible” amount of this settlement, Stewart noted first of all that it was several billion dollars less than what the company had set aside for liabilities of this very nature. Not only that, but the final amount is likely to be closer to $9 billion because the settlement amount will likely be tax deductible, because, as Steward pointed out, “Settlements for corporate fraud and malfeasance and donations to breast cancer charities are equal in the eyes of the law.”
We would only add to that the fact that JPMorgan is the largest bank in the nation, with assets that top $2.4 trillion. It employs about 255,000 people, which is about the population of Orlando. This is by no means a “shakedown” from which the bank will have any trouble recovering.
If anything, it’s the taxpayers and homeowners who have been victimized and “shaken down.”
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
‘F*ck All Y’all!’ Jon Stewart Goes on Epic Smackdown Against CNBC, FBN, Oct. 23, 2013, By Josh Feldman, MediaIte
More Blog Entries:
Miami Foreclosure Lawyers on Remaining in a Foreclosed Home, Oct. 16, 2013, Miami Foreclosure Lawyer Bog