Your missing mortgage documents are here, or maybe not (photo: eyemage/flickr)

I should have added one thing to my reactions to Jamie Dimon’s testimony. First of all, a set of anti-foreclosure activists disrupted the hearing at the beginning, demanding Dimon to “stop foreclosures now!” As that wasn’t the point of the hearing, this went mostly unaddressed on the panel. But then unassuming Sen. Herb Kohl decided to bring it up.

After a discussion about how JPMorgan’s loan-to-deposit ratios are much lower than comparable banks, giving them more funds to gamble with, Kohl said that his constituents often call him, and every other Senator, with loan modification problems. “Often they say the banks lose their paperwork. One constituent said to me ‘I don’t want to lose my house because they can’t get their paperwork straight.’” We know from Paul Kiel’s book that most of these “lost documents” simply went over to India in a cost-cutting measure, never to be seen again:

When homeowners faxed their documents, they didn’t go to Litton, Wyatt says. They went to India, where a low-cost company scanned and filed the documents — but often misfiled or lost them. Wyatt says Litton routinely denied modifications because homeowners had not sent their documents when, in fact, they had.

In a process internally referred to as a “denial sweep,” Litton’s computers would automatically generate denial letters for every homeowner who, according to Litton’s records, hadn’t sent their documents. But untold numbers of those documents had been lost on another continent. Wyatt complained about the practice in multiple meetings with senior management, he says, but managers were chiefly worried about reducing the overwhelming backlog.

So that was the issue at hand. Dimon’s response was priceless. First of all, he said to forward the information from the constituent to him personally, and he will take care of it. This is the typical fashion; the banks don’t jump on a foreclosure problem until it gets media attention or attention from a Senator in a hearing. After that it’s a fire alarm. Dimon then said, and I quote, “We don’t want you to lose your home because of our paperwork problem.”

How many hundreds of thousands of Americans have lost their homes because of paperwork problems over the last few years? How many are being thrown out using false documents, back-dated documents, forged documents and robo-signed documents? How many homeowners have lost their home because of technical screw-ups? Lost payments? Misapplied payments? Payments with 2 cents missing (that’s a real case)? Banks trying to foreclose on homes with no mortgage? Banks breaking and entering into the wrong home, one that doesn’t even have a delinquency? Is the number even countable at this point?

Sen. Michael Bennet, when he wasn’t pleading with Dimon to endorse austerity, said he would take up Dimon on his offer to look personally into individual mortgage problems. Shouldn’t we all have that privilege? So if you have a Chase mortgage and are getting the run-around from their customer service representatives, you can know call your Senator, and he will apparently go right to Jamie Dimon with the complaint. That should work smoothly. Give it a try!