Jamie Dimon urges overhaul of mortgage rules

JPMorgan Chase CEO Jamie Dimon called for an overhaul of federal mortgage regulations, arguing that “no rational person could think that everything that was done was good, fair, sensible and effective, or coherent and consistent in creating a safer and stronger system.”

In a letter to shareholders, Dimon argued that the post-crisis financial regulatory framework contains “poorly conceived and uncoordinated regulations” that have prevented banks from lending and hurt ordinary Americans. But he said the Dodd-Frank Act and related laws should be reformed, not abandoned.

For example, Dimon criticized that the False Claims Act makes it hard for banks to issue mortgages backed by the Federal Housing Administration because of the elevated risk of lawsuits. The law “has led us to scale back our participation in the FHA lending program in favor of less burdensome lending programs that serve the same consumer base – and we are not alone,” he wrote.

Dimon also urged the Department of Treasury to simplify mortgage servicing rules. “New mortgage rules and regulations total more than 14,000 pages and stand about six feet tall,” he wrote. “In servicing alone, there are thousands of pages of federal and state servicing rules now – clearly driving up complexity and cost.”

Uniform national servicing standards could increase mortgage lending by $300 billion, he claimed. [HousingWire] — Konrad Putzier