Mortgage Crisis

I was inspired to read about the mortgage crisis after reading an article about Frank Gong of JPMorgan Chase by Xinhua and CRI [China Radio International] English Service. In the article, Mr. Gong [speaking for JPMorgan Chase] commented about a “stimulus plan with tax cuts and measures to help the real estate market”. The response by the Head of the Research Institute in the Ministry of Finance of the People’s Republic of China [Jia Kang] and Jin Dongsheng, deputy director of the research institute of State Administration of Taxation dismissed the report by Mr. Gong. Regardless, the stock market in China increased seven percent. While the main subject is the mortgage crisis in America, the fact that JPMorgan Chase can affect markets [including mortgage] by utterance of words proves how some institutions can contribute to the mortgage crisis that is affecting America. JPMorgan Chase has no right to predict what will happen outside of the United States of America when it had a scandal brewing inside its neighborhood.

Before writing my reflection, I had to investigate what happened at JPMorgan Chase during the mortgage crisis. The reason was that an employee speaking for JPMorgan Chase was making a comment which could affect the real estate market in a positive and negative way. I went to an important source called The Oregonian and read a column by Jeff Manning who works at the Newspaper. Before blaming the banks and mortgage companies who are at fault for not adhering to the traditional and stable lending and loaning practices of the banking industry, it must be remembered that the consumer who initiate the loan process or refinancing process should have read the fine line in each contract or at least find a lawyer who specializes in the practices of the banking industry before signing away the house. The person who wants to refinance or obtain a loan should also take into account that brokers and lenders will receive more pay for a loan with a high risk than fixed rate loans of thirty years duration.

In the spring of 2008, Jeff Manning of the Newspaper “The Oregonian” published a two part series of a memorandum that leaked from an employee of JPMorgan Chase. The memorandum revealed how to approve risky mortgage loans from the automated mortgage company of Chase called Zippy. According to the memorandum, the surest way to get a risky mortgage loan approved was to inflate the income of the borrower and/or falsify the application of the person asking for the loan. JPMorgan Chase denied any wrongdoing yet they fired Ms. Tammy Lish [who was an employee of JPMorgan Chase in Portland, Oregon] after it was discovered that she sent the E Mail. Ms. Tammy Lish denies writing the E Mail and stated that she received it from another source “step in step with customer training documents”. Ms. Lish should have carefully looked at the source and document before sending it via E Mail. After all, her name might have appeared as the sender of the E Mail. Whether JPMorgan Chase is at fault or not is still being determined but that there was a secret memorandum with the logo of the company which was leaked to The Oregonian makes JPMorgan Chase ever so vulnerable. JPMorgan Chase should clean its own house with regards to risky loans before making statements that affect international markets.

According to the Ohio Freedom Alliance, the Federal Government in the United States of America is to blame for the Mortgage Crisis. The Federal Reserve Board which was established in 1913 after two previous attempts at a National Bank is a disaster that did nothing to prevent the Depression of 1929. The Federal Reserve Board managed to rescue the Fannie Maes and Freddie Macs only to increase our deficit and worsen the Mortgage Crisis caused by the Mortgage Scam. The solution would have been to declare the Federal Reserve Bank in bankruptcy, pay off the debts, and return the US Dollar to a Gold and Silver Standard. John F. Kennedy [during his Presidency] signed an Executive Order [before his assassination] which was never implemented. Executive Order 11110 was to return the power of issuing money to the United States Government and abolish the Federal Reserve Board. The consumer, the banks, and the US Government are responsible for the Great American Mortgage Scam and there is no easy way out. We will have to swallow our pride and be proactive as US Citizens before it is too late. We should assume responsibility for our actions instead of blaming other countries and people. We should also ask JPMorgan Chase and other mortgage companies to look inside themselves before looking on the outside.

Xinhua; CRI English: “Economists Doubt JPMorgan’s Stimulus Estimate”

Manning, Jeff; The Oregonian: “Chase mortgage memo pushes ‘Cheats & Tricks'”

The Oregonian: “Zippy Cheats & Tricks memo”

CrimethInc.:”The Mortgage Crisis for Beginners”

Ohio Freedom Alliance: “F.R.E.E. = Federal Reserve Education Effort”

Ohio Freedom Alliance: “What is The Federal Reserve Bank and Why Do We Have It?”