Pressed by nuns, J.P. Morgan releases ethics report

WASHINGTON (MarketWatch) — An organization of nuns has got J.P. Morgan Chase  to confess to its financial sins and work to repent.

The bank released a 96-page report promising a commitment at the behest of an organization of nuns that includes a promise to do better.

The report, entitled “How We Do Business,” was put together by the investment bank JPM, +0.05%   in response to the request of a group of investors led by the Sisters of Charity of Saint Elizabeth, an organization of nuns.

Among the actions the bank confesses to are mortgage foreclosure, its involvement with Libor fixing and the infamous London Whale incident, when it lost $6 billion due to complex trading system involving derivatives.

Read on.

p. 65:

Case study: Mortgage servicing improvements
As one of the United States’ largest mortgage lenders,
we must have robust policies, processes and procedures
relating to foreclosures. Unfortunately, like
many in our industry, our practices were not designed
to handle the unprecedented increase in volume that
occurred as a result of the financial crisis. Looking
back, we recognize there were a number of areas
that needed enhancement — from sworn document
execution (to prevent so-called robo-signing) to governance
processes and quality control.
Much of our work has focused on improving our
operating model in this area, training our employees,
improving our customer communications, enhancing
our technology platforms, ensuring sustainability of our
programs, and deepening our relationships with our
customers, third-party vendors and other key stakeholders.
Our goal is to deliver affordable, sustainable
and meaningful home preservation assistance by:
• Focusing on earlier intervention to help keep
customers in their homes
• Pursuing foreclosure prevention options that provide
significant and meaningful relief
• Emphasizing affordable and sustainable outcomes
• Delivering fair assistance across geographic regions
and income levels and among protected classes

Operating model changes
One of the most important changes we have made is
adopting a new operating model that assigns a single
point of contact — a Customer Assistance Specialist
— to each customer with the key benefit of staying
connected to customers when they are having difficulty
making their payments. In this way, we can help
customers pursue a loan modification program at an
early stage of delinquency to avoid foreclosure. Other
improvements include:
• Introducing an engagement team to support the
Customer Assistance Specialist so team members are
able to re-engage customers for faster resolution
• Assigning Customer Assistance Specialists who are
specifically focused on Servicemembers Civil Relief
Act and bankruptcy customers to provide the degree
of specialized knowledge necessary to best support
customers facing a financial hardship

p. 66:

Customer communications
We also have been enhancing our communications with
customers to provide better counseling and more clarity
for customers about their options. To improve communications
for customers considering ways to prevent
foreclosure, we have:
• Improved customer information and education by
letting customers know at the outset the options and
benefits that may be available to them
• Simplified a forms/documents checklist specific to
each customer
• Enhanced customer outreach until application
documents are completed
• Established early notification of missing or
incomplete documents and frequent status updates

Technology
As we have discussed throughout this report, one area
we are consistently focused on improving is technology.
That also is true in our Mortgage business. We have
invested more than 220,000 hours of our technology
employees’ time to improve our Mortgage business,
including:
• Deploying a Customer Assistance Specialist model
• Enhancing our loan modification application
• Improving systems that track and manage customer
complaints and responses
• Implementing more than a dozen additional
technology enhancement projects ranging from
data quality, data management and automated
exception tracking
These enhancements directly support the new business
model, enabling customers to have direct contact with a
single point of contact and tailoring communications to
present only those foreclosure prevention options that
we can offer directly to a customer.

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