The Back Alley Archives

I laugh when it read that the gas prices have increased slowly? I know that 5 years may seem like an eternity to someone in their early 20's, but when I bought my first NEEDED minivan about 5 years ago, I remember being upset because gas started to get more expensive...it went up to around $1.65 a gallon! So in 5 years, that has doubled...I think that is a dramatic raise in price. The only thing that compares is the cost of my healthcare.

But I agree with TT when he said for every time Rad quits getting his massage there will be others there to get a massage. Especially all those foreign tourist who will be more likely to come to America for that trip they always dreamed of...why? because their money is worth more! They will be keeping a lot of the service industries and tourist industries in business...Or there is hope that they will help at least provide some relief to the lack of US domestic customers.

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

The document, a copy of which was obtained by The Oregonian, bears a Chase corporate logo. But it's unclear how widely it was circulated or used within Chase.

Bank spokesman Tom Kelly confirmed that the "Cheats & Tricks" memo was e-mailed from Chase but added that it does not reflect Chase corporate policy.

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Chase, the nation's second-largest bank, originates mortgage loans itself but also operates a wholesale arm that underwrites and funds loans brought to them by a network of mortgage brokers. The "Cheats & Tricks" memo was instructing those brokers how to get difficult loans approved by Zippy.

"Never fear," the memo states. "Zippy can be adjusted (just ever so slightly.)"

The Chase memo deals specifically with so-called stated-income asset loans, one of the most dangerous of the mortgage industry's innovations of recent years. Known as "liar loans" in some circles because lenders made little effort to verify information in the borrowers' loan application, they have defaulted in large number since the housing bust began in 2007.

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The document recommends three "handy steps" to loan approval:

Do not break out a borrower's compensation by income, commissions, bonus and tips, as is typically done in a loan application. Instead, lump all compensation as the applicant's base income.

If your borrower is getting some or all of a down payment from someone else, don't disclose anything about it. "Remove any mention of gift funds," the document states, even though most mortgage applications specifically require borrowers to disclose such gifts.

If all else fails, the document states, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want," the document says. "Do the same for assets."

Chase's Kelly said the bank has never encouraged any of the suggestions in the memo.