JPMorgan Chase CEO Jamie Dimon said President Obama's decision to expand investigations into home lending and sales of MBS could stop settlement talks with the states over foreclosure practices.
"It has a pretty good chance of derailing it," Dimon said in an interview Thursday with CNBC from Davos, Switzerland.
The president, in his State of the Union address Tuesday, said he has asked his attorney general to create a special unit of prosecutors to expand investigations into home lending and packaging of MBS tied to the financial crisis of 2008.
However, no details have been released about the new unit, and some observers have suggested that the president's remark may've been a ploy to get servicers to settle ahead of time.
"I think it would be better for America if that settlement took place," Dimon noted. "If this thing derails that, so be it."
The bank is one of five or so megaservicers in active talks with state AGs and DOJ to settle robo-signing allegations. The deal could cost the industry between $20 billion to $25 billion in commitments and charges.
JPM is the nation's second largest residential lender and servicers. During the subprime boom its investment banking division was a top ranked issuer of private label securities backed by home loans.
JPM owned an active subprime lender during the boom, but exited the business earlier than many of its peers.
