JPMorgan's Dimon: No mortgage writedowns |
By Jennifer Liberto, senior writer CNNMoney.com
March 31, 2011
WASHINGTON (CNNMoney) -- The head of JPMorgan Chase said Wednesday that banks would not consider writing down mortgages for homeowners who can make payments, an idea at the center of talks aimed at fixing the mortgage mess.
"Principal writedown for people who could pay their mortgages? Yeah, that's off the table," JPMorgan Chase (JPM, Fortune 500) CEO Jamie Dimon said when asked about the idea after an appearance before a U.S. Chamber of Commerce forum in Washington.
Regulators and state attorneys general have been trying to get the banks to include mortgage principal writedowns as part of a proposed settlement of allegations that banks wrongly foreclosed on thousands of homeowners. The writedown proposal has been a key sticking point in the negotiations.
In addition to JPMorgan Chase, the other servicers are Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), Citigroup (C,Fortune 500) and Ally Financial (GJM).
Dimon spoke to the U.S. Chamber about a wide range of topics from monetary policy to struggling municipalities.
Dimon had little sympathy for municipalities and suggested that investors should expect that some of them will go bankrupt. But he suggested it won't "shatter America" and it's "part of the credit cycle."
"The states have the wherewithal to fix their problems," Dimon said. "It's not going to stop the United States from starting to grow."
Dimon spent most of his discussion with Chamber president Tom Donohue blasting regulators' efforts to enact new rules on derivatives, or complex financial contracts that financial firms and companies use to hedge risk.
He specifically opposes requiring companies such as airlines and other companies to post cash up front before they enter into a deriviatives contract.
"If we're required to have Caterpillar to post margin requirements, they're simply going to do business in Singapore, where they don't have to," Dimon said.
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