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(108,903 posts) Thu Nov 21, 2013, 07:14 AM Nov 2013

12 Ways JP Morgan Admitted It Ripped Off Americans to the Tune of Billions

http://www.alternet.org/economy/jp-morgans-corporate-crime-confession

***SNIP

This declaration is not written in plain English. So here’s AlterNet’s translation of what Morgan said that it did, followed by the relevant legalese. This is as close to a corporate confession of greed and deceit as Americans get today.

1. J.P. Morgan knew it had bad loans from the start.

J.P. Morgan made billions by buying high-interest mortgages and selling them as packages to investors, who expected solid returns. Inside Morgan, its contactors knew that they were buying loans that didn’t even meet the brokers’ standards.

“JPMorgan employees were informed by due diligence vendors that a number of the loans included in at least some of the loan pools that it purchased and subsequently securitized did not comply with the originators’ underwriting guidelines.”

2. J.P. Morgan knew appraisers were inflating values.

To get a mortgage, lenders require an appraisal as part of a clearance process. Morgan knew appraisers were rubber-stamping home values that were absurdly high, but ignored it. The bigger the loan, the more profit in interest payments.

“A number of the properties securing the loans had appraised values that were higher than the values derived in due diligence testing from automated valuation models, broker price opinions or other valuation due diligence methods.”

3. J.P. Morgan lied about these values to investors.

Their business was based on reselling bundles of loans, so they deliberately over-promised to investors and hid information that the loans would likely fail.

“JPMorgan represented to investors in various offering documents that loans in the securitized pools were originated “generally” in conformity with the loan originator’s underwriting guidelines.”

***EQUALITY BEFORE THE LAW SEEMS LIKE A QUAINT, ANTIQUATED NOTION ANY MORE.