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JPMorgan confirms big job cuts in mortgage banking

  • The just-released presentation materials for JPMorgan's (JPM) investor day confirm 6K planned job cuts in the bank's mortgage banking division, and an expense reduction of about $2B for that division. For overall Consumer & Business Banking, JPMorgan expects 1% expense growth and a 2K headcount reduction. "We expect to exit 2016 with expense $2B lower than 2014."
  • As for overall firm ROE, the expected range is 15-16% vs. a previous target of 16%.
  • The event begins at 8:30 - agenda and webcast.
  • Shares -0.9% premarket
Comments (8)
  • Tom Armistead
    , contributor
    Comments (5273) | Send Message
     
    It seems they need to axe a lot of jobs to pay for all those fines plus the London Whale escapade.

     

    For starters, mortgage banking in the past would have benefitted from having adequate staffing for those processing foreclosures, not to mention those checking the accuracy of mortgage applications.

     

    This is bad. The head honchos screw up and the help takes the hit.
    25 Feb, 08:07 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2155) | Send Message
     
    TOM

     

    Many times bank outsource the mortgage process after the closing.
    True the bank is responsible but it's the contractors who cause the problem.
    Once the government started discounting the loans a home mortgage became just a commodity to most banks.
    25 Feb, 12:05 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5273) | Send Message
     
    NYCTEXASBANKER, I don't think it's accurate to say the government discounted the loans. Fannie and Freddie (allegedly private enterprises) both bought and guaranteed loans.

     

    Although there were warranties and representations involved, enforcement was spotty. Bank of America, for example, was able to enforce a standard that any mortgage that was paid for 12 months was good enough that it couldn't be returned to the originator. They were shell shocked when MBIA among others started enforcing representations and warranties in earnest and according to the terms of the contracts. Finally Freddie and Fannie started enforcing them, albeit half-heartedly. Regulators had to step in.

     

    Fannie and Freddy were not bankrupt if warranties and representations had been properly enforced from the beginning.
    25 Feb, 03:13 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2155) | Send Message
     
    tom

     

    Sorry, anytime a bank sold to the government and it was not paid full value they used the term discount. I was on the treasury operation/risk side. The only time I ever touched a mortgage was as the mortgagee.
    Everyone who touched a mortgage it seems screwed up. The one thing that has always puzzled me was that those who gave false information were never pursued.
    25 Feb, 03:42 PM Reply Like
  • fuzzymc
    , contributor
    Comments (103) | Send Message
     
    Jobs are becoming a thing of the past, online banking is gaining speed, apps are submitted online, tellers at banks will become fewer, small banks will continue to be swallowed by large banks, every buisiness is cutting expenses to make numbers and shareholders happy! Get used to it!!
    25 Feb, 08:23 AM Reply Like
  • DAVEBABE
    , contributor
    Comment (1) | Send Message
     
    Tom A. regards to Bankers "mortgage banking in the past would have benefitted from having adequate staffing for those processing foreclosures, not to mention those checking the accuracy of mortgage applications..." that is novel and idyllic thinking.

     

    I worked as Mortgage Broker during that period. Sexy new Mortgage Bankers would recruit ; application writers and denied applications; New breed of mortgage underwriters appeared. The math didn't matter. Wall Street Mortgage Companies were taking ''all the paper they could find", and paying generous vigs on back of loans. The incentive was to 'push paper'.

     

    I warned others as to this practice and personally never wrote one unconventional mortgage. To the contrary i wouldnt even write LTV's of more than 85% at that time. Income qualified. So i earned alot less.

     

    This was not an "Accident" or ''Crash". it was a Laundering of ill gotten monies and a transfer of the largest single remaining Wealth in America. Stored wealth in Home ownership.
    More disturbing is the fact , the perpertrators were actually rewarded (bailed out) and then they supposedly 'paid back' the Feds' (our money) with borrowed money and profits from running up stocks.

     

    Thier fines are miniscule in light of the lost Trillion dollars to Wealthy Bankers and Investors globally.
    25 Feb, 09:34 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5273) | Send Message
     
    DAVEBABE, thanks, a very accurate description of what happened.

     

    Even a small effort at regulation would have reduced the damage. As it turns out, the Fed didn't have a clue how bad this stuff was. Makes me wonder if they are up to regulating the industry as standards start to slip again.
    25 Feb, 03:04 PM Reply Like
  • toosmarttofail
    , contributor
    Comments (525) | Send Message
     
    JPMorgan seems to have a huge bet on Silver not exceeding $22.00 an ounce. If they lose that bet I wonder if it won't be 2008 again.
    25 Feb, 11:55 AM Reply Like
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