NAMB responds to JPMorgan Chase CEO Jamie Dimon's commentsMortgagePress.comNAMB, JPMorgan Chase, Jamie Dimon, U.S Chamber of Commerce 3rd Annual Capital Markets Summit
The National Association of Mortgage Brokers was disappointed
with comments made by JPMorgan Chase Chairman and CEO Jamie Dimon
today regarding the mortgage broker business. In a speech before
the U.S Chamber of Commerce 3rd Annual Capital Markets Summit,
Dimon stated that his failure to terminate the company's mortgage
broker business was the "biggest mistake" of his career. NAMB
President, Marc Savitt, CRMS, has issued the following statement in
response to these comments:
"It is disappointing to once again refute senseless attacks on
the mortgage brokerage industry based on misinformation. Mr.
Dimon's comments clearly reflect his poor understanding of the
mortgage industry and the role of the mortgage broker. NAMB urges
Mr. Dimon to recognize that mortgage brokers do not create loan
products, do not determine the automated underwriting systems used
to qualify borrowers, do not underwrite the loans, and do not
approve borrowers for those loans--Wall Street investment banks
'who are now out of business' did that."
Furthermore, Mr. Dimons remarks on U.S. economic outlook to the
Economic Club of Washington acknowledges the real problem was a
failure of management saying, "Bad underwriting was totally to
blame, however we didn't see the results because the housing market
was so good and we didnt see any losses." Underwriting is the
fundamental role of his bank and his management and any bad
underwriting is due to their poor judgment.
"I understand the need to blame someone outside the financial
institutions for the failures of leadership and accountability to
their respective Boards of Directors," Savitt said, "but Mr. Dimon
should admit to the world that they created mortgage products and
sold them through all origination channels--banks, lenders, credit
unions, homebuilders, mortgage brokers based on Wall Street's
determination that they could be securitized and sold to investors
across the globe. Most Wall Street investment banks owned the
largest of the sub-prime lenders, a fact Mr. Dimon failed to
disclose in his remarks."
Mortgage brokers work with consumers to help them through the
complex mortgage origination process. We add value to the process
for both consumers and lenders by serving areas that are typically
underserved by banks and other lending institutions. Mortgage
brokers also add value by providing goods, facilities, and services
with quantifiable value, including a customer base and
goodwill.
Separately, NAMB would like to commend the Union Bank of
California in its due diligence in approving mortgage brokers as a
reliable delivery channel for mortgage loans. Union Bank Senior
Vice President Craig Cole stated to The Orange County
Register, "Most lenders mismanage the broker channel by not
being disciplined about who they work with and offering products
indiscriminately through that channel." The careful monitoring of
all loans funded by banks is a critical component of prudent
lending.
For more information, visit www.namb.org.
