Here Is One Man's Experience with WaMu and JP Morgan Chase in the Aftermath
An anonymous fellow commenting on a BI article about how Jamie Dimon found a 30 billion dollar treasure (unexpected bonus) reveals alot. I have not verified his story but it is worth reading, especially when we see that a bank can foreclose on a current loan. Something to think about for all of us:
JP Morgan Chase got my WaMU apartment loan essentially for free from the FDIC when the FDIC "sold" WaMu and all its assests to Chase for a little more than $1B. After two years on time payments, my former WaMu loan term expiredand then, rather than extend the loan - Chase chose to "voluntarily foreclose" on the current loan.
While I was fighting Chase in court, Chase put a receiver in place on the building, and let it fall into such disrepair it was cited by the City of Los Angeles for neglect. Unfortunately, since I was on title, I got the paper work and had to go to criminal court and prove the receivership.
If the loan had been Chase's, they would have lost $500K off the million dollar loan by selling a tagged building at auction. As it was, since the loan was free, they made $500K instead of $1M. Oddly enough, at this two year mark Chase started firing all the former WaMu servicing reps I had been working with. It was carnage. 4 in one month. Every time I called, the person I was dealing with had been fired. I assume Chase was getting pushback from the employees, and the result was to bring in demon spawn Janet Scott to their Stockton commercial loan center and clear out all the WaMu workers so Chase could run roughshod over the former WaMu borrowers. I have never seen such a mass firing in one month.
In any event, all of that money should have gone to the wiped out WaMu shareholders. As many commenters have noted, this was a theft from WaMu shareholders, which Dimon is now touting as an "unexpected bonus." Hey, you give me a $30B money earning asset, I will be brilliant too. Even if I see the whole thing, I will make money, since it was FREE.
Selling my building at that steep loss was a travesty to both WaMu and Chase shareholders, but in my mind in was outright theft from me. It was a beautiful historical building I had spent four years restoring (I mean on my hands and knees.) But Jamie badly needed cash because it had just come out he lost $6.5B on the London Whale, um, venture.
This article lauding Slimin' for his slick management of a free gift from the taxpayer is nauseating. The article mentions that Chase could lose a great deal of these loans as they mature and people refi out.
A word of advice for investors: It is not good business to borrow from a bank that will foreclose on you even when you keep your loan current. All these borrowers should refi ASAP. I speak from experience.