The Loving and Merciful Act of Foreclosure
I missed this howler from a few months ago, but it's so outrageous that I've got to comment on it, even thought it's stale. I'm amazed that this didn't get much more press. In the course of a CNBC interview (full show here, foreclosure discussion runs from 4:07 to 5:23), JPMChase CEO Jamie Dimon stated that:
"Giving debt relief to people that really need it, that's what foreclosure is."
As he explained:
"[Homeowners] are probably better off going somewhere else, becuase they get releived almost 100% of the debt through foreclosure."
For real? It's debt relief? Why not just go old school with "let them eat cake"?
"Debt relief" requires a forgiveness of debt. It's a gift, not an exchange. There's no quid pro quo. In foreclosure, however, the homeowner gives up the house, and doesn't necessarily get any debt relief. If the mortgage is recourse, there could still be a deficiency judgment. Does Dimon mean that JPMChase is forgoing all deficiency judgments? I doubt it. And even if so, there's an exchange of debt for house. That's hardly debt relief. That's debt collection.
There are, without question, some homeowners who feel quite relieved when the foreclosure is complete--the uncertainty of their living situation is finally resolved, and they aren't saddled with a mortgage any more. But they might now have a mountain of unsecured debt.
I can't fathom how Dimon conceives of foreclosure as an act of mercy. Whatever helps you sleep at night, I guess.