Hoping to troubleshoot some of the problems plaguing its mortgage operations, Jamie Dimon on Friday dispatched one of his top lieutenants to oversee the Chase Home Lending business.
Frank Bisignano, JPMorgan Chase’s chief administrative officer, will now add supervising the Chase’s mortgage origination and loan payment collection businesses to his duties managing many activities, like technology and real estate, for the bank. David Lowman, the current head of Chase Home Lending, will retain his title but now report to Mr. Bisignano.
The management change comes as Chase’s mortgage business has faced considerable challenges amid the recession. Chase, like most of its peers, has faced enormous losses on its large portfolio of home equity and mortgage loans after loosening its lending standards in during the housing boom. But it has also struggled to digest the mortgage operations that it acquired with its takeovers of Washington Mutual and Bear Stearns during the financial crisis.
Many parts of the business ran on separate technology systems, making a three-way integration especially tricky. At the same time, Chase has come under fire from Washington for failing to cope with a giant wave of foreclosures as well as overcharging several thousand military veterans.
“The mortgage business for everybody has changed tremendously,” Mr. Bisignano said in a brief interview on Friday. “Adding help to it can never be a bad idea.”
Charles W. Scharf, the head of Chase Retail Financial Services, and Mr. Lowman have had their hands full contending with all of these issues over the last few years. They have significantly tightened the bank’s lending standards, halted the sale of new mortgages through independent brokers, and overhauled its servicing operations with thousands of new hires and improved technology to try to keep up with the foreclosure mess. In 2010, Chase also began cordoning off its existing portfolio of real estate loans from those that conformed to its tougher new standards — a so-called “good bank – bad bank” strategy that has been used frequently by financial institutions to restructure their operations.
But with Mr. Bisignano, Mr. Dimon is installing one of his strongest managers with long history overseeing the operations of several banks. He also comes from a family of veterans, which will be crucial to smoothing relations with lawmakers, regulators and military brass.
A trusted lieutenant since their days at Citigroup, Mr. Dimon brought him to JPMorgan Chase in 2005 as his chief administrative officer and tasked him with consolidating the bank’s real estate and finding other cost-savings.
At Citigroup, Mr. Bisignano ran its global transaction services business and helped oversee technology and operations for its investment bank. Mr. Bisignano, 51, will report to both Mr. Dimon and Mr. Scharf.
Here is the email from Mr. Dimon and Mr. Scharf:
As you know, our Home Lending business has gone through a period of enormous challenge and change. Our team has worked day and night for almost three years to deal with the unprecedented credit environment and the added complexity from the WaMu and legacy Bear Stearns EMC merger integrations.
We recognize how much we’ve accomplished, but know we still have a great deal of work ahead of us. Given the importance of this business to our company and our customers, we’ve asked Frank Bisignano, our Chief Administrative Officer, to take on additional responsibilities and get more directly involved in managing this business. Effective immediately, Dave Lowman, CEO of Home Lending, and his team will report to Frank.
Frank will continue to report to Jamie as CAO and will report to Charlie on Home Lending, which will remain part of Retail Financial Services. He continues on the firm’s Operating Committee and Executive Committee, and joins the RFS Management team.
Frank is a great partner to all of us and an extraordinary operating executive. He is an integral part of all six of our lines of business, and we are thrilled to be able to leverage his leadership and experience more directly in Home Lending.
We have a leading Home Lending business. Chase is the third-largest mortgage lender and the #3 mortgage servicer in the country. We have 8 million customers who are living in a home with a Chase mortgage. When customers have difficulties, we do everything we can to help them find a way to avoid foreclosure. We have offered more than 1 million modifications and prevented foreclosure for more than 480,000 customers. We recently announced that we are opening another 25 Chase Homeownership Centers, bringing our total to 76 in 23 states and the District of Columbia.
We look forward to working with Frank to make our Home Lending business even stronger.
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