Dimon Vows Fight Moynihan Lost Over Claims From Mortgages
Jamie Dimon, who’s already spent $18.5 billion cleaning up mortgages at JPMorgan Chase & Co. (JPM), is warning a growing list of claimants that they’re in for a fight.
Investors demanding that the biggest U.S. lender buy back soured loans or compensate them for losses on mortgage securities “face a long and difficult road,” Dimon said last week in a shareholder letter. Those lining up include holders of $95 billion of bonds represented by Gibbs & Bruns LLP, the law firm that won $8.5 billion last year from Bank of America Corp. (BAC).
“We are going to fight repurchase claims that pretend the steep decline in home prices and unprecedented market conditions had no impact on loan performance,” Dimon, chief executive officer of the New York-based lender, wrote in the April 4 letter. He’ll also oppose “securities claims brought by sophisticated investors who understood and accepted the risks.”
Dimon, who updates investors on his firm’s mortgage losses tomorrow, is seeking to contain expenses from faulty loans that have cost the industry more than $72 billion. Similar combative language didn’t work for Bank of America CEOBrian T. Moynihan, who said in 2010 the firm will engage in “hand-to-hand combat” to fend off demands before agreeing to a string of settlements.