Washington Mutual

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Jpmorgan Chase-to Buy Or Not To Buy?
To Buy or Not To Buy?
JPMorgan Chase was born with a silver spoon in its mouth but that hasn't stopped it from grabbing more. One of the largest financial services firms in the US, it has more than 5, 100 bank branches in a couple dozen states (and counting) and is also among the nation's top mortgage lenders and credit card issuers. Active in some 60 countries, it also boasts formidable investment banking and asset management operations. The firm's subsidiaries include the prestigious JPMorgan Private Bank and institutional investment manager JPMorgan Asset Management (with some $1. In 2008 JPMorgan Chase bought Bear Stearns and the operations of failed thrift Washington Mutual (WaMu). A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its JPMorgan and Chase brands.
JPMorgan Chase had a hand in the worst of the subprime lending excesses, providing financing to the nation's two largest subprime lenders, Countrywide and Ameriquest. This financing provided the companies with the capital they needed to originate subprime mortgages. JPMorgan Chase also owned a major subprime lender, Chase Home Finance, and has acquired two banks with large subprime operations: Washington Mutual (which owned 5 Long Beach Mortgage Co. ) and Bear Stearns (which owned 17 Encore Credit Corp. ). Together, these five firms issued over $295. 3 billion in subprime loans from 2005-2007.
WaMu was a leader in subprime loans and pay-option adjustable rate mortgages ("option-ARMs"), which can actually grow the principal of the loan even as homeowners continue to make monthly payments. Even as the initial signs of a housing downturn became clear, WaMu kept making these risky loans well into 2007. At the end of 2007, over 56% of WaMu's loan portfolio consisted of subprime loans, option-ARMs, and home equity loans.
Even after the crisis, JPMorgan Chase is up its old tricks, repackaging mortgage-backed securities that have been stuck on their books since the housing bubble burst and selling them as a new product. Known as "re-remics", they simply pull out the worst of the bonds to boost the credit rating without addressing the quality of the underlying mortgages or the faulty structure of the product.
To help pay for its executives' bloated compensation, JPMorgan Chase has made itself the beneficiary on $11. 1 billion in life insurance policies for its employees and former employees. The bank gets annual tax-free income from investments in the insurance contracts, helping to offset executive compensation expenses, and then receives another tax-free windfall when employees and former employees die.
The company is making a profit by lending taxpayers their own money. Even after billions in bailouts - including access to ultra-cheap loans from the Federal Reserve, speculated to be as low as 0. 5% - JPMorgan Chase is manipulating government budget processes and charging local and state governments high interest rates. In California, JPMorgan Chase at first refused to accept the state's IOUs at a crucial juncture, but eventually acquiesced and forced the state to seek a 3% loan from it. Even when JP Morgan Chase refinanced the loan to 1. 25-1. 5%, it still benefited by charging tax payers a new round of fees. In Philadelphia, JPMorgan Chase offered a similar 3% bridge loan, but this one featured an 8% reset if the loan was not paid off by December 1st, creating a ticking time bomb for city officials awaiting the resolution of Pennsylvania's state budget process.
New research report for this company available from Company Eye for only 3 on: http: //sites. google. com/site/companyeye/research-reports/JP-MorganTopics related articles：


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