A Former Chase Banker Spews His Unethical Guts

The banner NY Times headline was compelling, A Banker Speaks, With Regret By NICHOLAS D. KRISTOF
Published: November 30, 2011    The NY Times begins:

“If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the country’s housing mess. As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were “no documentation” mortgages.

“On the application, you don’t put down a job; you… don’t show income; you don’t show assets,” he said. “But you still got a nod.” [BTW – the nod is from upper management].[Insert comments by DeadlyClear]

“If you had some old bag lady walking down the street and she had a decent credit score, she got a loan,” he added.” [Then the story of regret fades off into the sunset.]

Theckston says that borrowers made “harebrained decisions” and “exaggerated their resources” but that bankers were far more culpable — and that all this was driven by pressure from the top.

[Well, Mr.Theckston, in most cases the borrowers did not dream up the exaggeration – the loan officers did. As for harebrained ideas – it was the banks that inflated the appraisals.  It would only be “harebrained” if you knew the appraisals were way out of whack. The borrowers did not know this. But thanks for the admission anyway.  We could write a book about the Bill Dallas philosophy of: “you should sell all the debt that the consumer even conceives of ever getting.” (Source: Real Estate Finance Today. Washington: Mar 31, 1997. Vol. 14, Iss.7, pg. 3).  This is when banks shifted from legitimate property appraisal value as the loan anchor to a “borrowers’ credit and willingness to pay” basis for the amount of the loans.]

“You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,” said Theckston. “That was crazy, but the banks put programs together to make those kinds of loans.” [Who do you think planted those ideas in the old bag lady’s mind? The banksters thought they were Walt Disney and sold their delusions to anyone who would listen.]  Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

[Turned a blind eye? More like too busy counting their bonus monies and buying Lear jets. IBG-YBG]

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.”  [Ship Ahoy]

One memory particularly troubles Theckston. [Only one?]  He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans. [Sound familiar?]

These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.”
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By DEADLY CLEAR 

Okay – let’s see… it appears:

• Theckston admits he knew what was going on and that it was wrong;
• Theckston admits he was participating;
• Theckston admits to predatory lending and racially profiled sales;
• Theckston admits to targeting the elderly;
• Theckston admits he knew he filled out fraudulent applications;
• Theckston admits he coached and coerced borrowers;
• Theckston admits Chase management knew what was going on;
• Theckston admits he aided and abetted the scheme;

Does anybody see an orange jumpsuit in this guy’s future? At least take him in for questioning, Florida. Hey, ya got a whistle-blower!  Besides what kind of nut would spill his unethical guts to a New York Times reporter for all the world to read?
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NY Times continues:

“In late 2008, when the mortgage market collapsed, Theckston and most of his colleagues were laid off. He says he bears no animus toward Chase, but he does think it is profoundly unfair that troubled banks have been rescued while troubled homeowners have been evicted.” [Uhhh Theckston – did you consult your attorney before this interview?  You should probably consult him about the statute of limitation for fraud… hello… Glad you got this off your chest, fella.]

“When I called JPMorgan Chase for its side of the story, it didn’t deny the accounts of manic mortgage-writing. Its spokesmen acknowledge that banks had made huge mistakes and noted that Chase no longer writes subprime or no-document mortgages. It also said that it has offered homeowners four times as many mortgage modifications as homes it has foreclosed on.” [What a crock of (expletive), yeah? Got a Chase Mortgage? Then you know.]  

[Continue reading on New York Times…]