March 28, 2008

FLASH: We have our first major mortgage fraud smoking gun: "Zippy Cheats & Tricks"


Hopefully the Oregonian did their homework and verified this document isn't a fake, but assuming it's real, it's one of the first of many REIC smoking guns to be found - once the FBI and SEC do their jobs and start raiding REIC offices nationwide.

And Angelo Mozilo's home of course...

Here's the skinny on "Zippy":


Chase mortgage memo pushes 'Cheats & Tricks' - The bank says it never backed the strategies, which detail how to get an iffy loan approved

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

9 comments:

Anonymous said...

The name of this scandal is too good to be true!

LauraVella said...

Oh wow, they're going down if this is indeed true.

Buzz Saw said...

You know what this means? That's right, BONUS TIME BAYBEE!!

Anonymous said...

Memo's like this one will make a nice tidy case file for the lawyers in the future. It does little to fix the mess though. The cheats and lies that certainly ran rampant at most of the mortgage firms is obvious in the forclosure stats. I cant see how some are allowed to continue to operate, and even worse, able to pull up to the Fed discount window and exchange this garbage for real money.

condosleazy price said...

Keith,

I was a branch manager for Chase for a couple of years through the boom. My loan officer used to explain the loan process to clients this way:

Client: How much can we borrow?

LO: I can give you a million dollars if you "state" that you make enough money.

Client: What?!

Basically, just about anyone could qualify for a loan up to a million with two caveats. One, they had to have relatively good credit and, two, they had to be willing to lie about their income. This was on a stated, no doc loan.

DOPES said...

BERNANKE: CALL JP AND TELL THEM THEY'RE GONNA BUY BEAR STEARNS...

PAULSON: WHAT IF THEY SAY NO???

BERNANKE: TELL THEM I'M GONNA FINANCE THE DEAL...

PAULSON: YOU KNOW NOBODY LIKES THE BEAR...

BERNANKE: DON'T DISCLOSE THE SOURCE OF THE GIFT MONEY...

BERNANKE: RAISE THE LOAN $500 MILLION AT A TIME UNTIL THEY APPROVE IT...

PAULSON: GOT IT BOSS...

DOPES!!!

Poor Dad said...

either your slinging crack rock or you've got a wicked jump shot

s/stock/mortgage/g

I wonder what speculative bubble the Federal Reserve will set up next now that the "brokers" can't sell their mortgages (before that, it was tech stocks).

Peter T said...

From what I know of corporate America, this memo is a fake (but a good one). The memo advocates fraud, and a corporation wouldn't open itslef up for lawsuits so easily.

Anonymous said...

sounds fishy. bankers may be liars, cheaters and whores. but they're not stupid enough to circulate a memo like that.