JPMorgan Chase is gradually reducing its mortgage portfolio to “close to zero” as it reviews mortgage losses and works through litigation over loan-servicing and foreclosure practices, Bloomberg News reported.
The bank has already reduced its mortgage holdings by $19.3 billion in the last 12 months and will continue to shed assets by as much as 15 percent a year “forever,” according to CEO Jamie Dimon.
“It’s going to go down 10 or 15 percent a year until it’s close to zero,” Dimon said.
JPMorgan’s earnings have taken a substantial hit as a result of continuing litigation over mortgage-related issues. It recently added $1.27 billion to its litigation reserves and took a $1 billion charge in the second quarter to clean up outstanding foreclosure-related matters.
“There have been so many flaws in mortgages that it’s just — it’s been an unmitigated disaster,” Dimon said. “We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else and it’s going to go on for far too long a time.”
The bank will continue originating home-equity loans at its current pace of $1 billion to $2 billion a quarter, Bloomberg said. [Bloomberg]