Chase 1st quarter results
Chase easily brought home a hefty profit of $3.3 billion in the 1st quarter 2010, mostly from its investment banking division and trading arm. It is amazing what you can do when the government will give you money for almost nothing. Their loan portfolio is of course still performing poorly, a little more poorly in the 1st quarter 2010 than the previous quarter, as they have added to their loan reserves.
What is interesting though is information in this article about Chase’s 2nd lien loan portfolio, a not insubstantial $131 billion in size. While only 5% of the outstanding loans are delinquent, about 50% of those loans are underwater. Is it just me or does that sound like a HUGE time bomb waiting to go off.
If you want to read Chase’s David Lowman’s full recent testimony before Congress here it is.
Foreclosure, Legal & regulatory, Loan modification | admin April 14, 2010
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By coakl, January 10, 2011 @ 6:31 pm
Yes, you’re right about the time bomb.
This is why Chase is uncooperative on loan mods: the lender in the 2nd lien position (a.k.a. the home equity line of credit) usually gets shafted, recovering little or nothing.
As more and more people realize that their property are more or less underwater for the next couple of decades, they will walk away.
Strategic defaults equals BIG TIME BOMB BLOW UP in Chase’s face.