Top 10 Marketing Trends of 2012

(Updates with mortgage debt outstanding in ninth paragraph and to show Dimon doesn’t want the job in sixth.)

Jan. 13 (Bloomberg) — Jamie Dimon has a plan to fix the U.S. housing market: lock mortgage lenders and regulators behind closed doors until they figure it out.

“I would convene all the people involved in the business, I would close the door, I’d stay there until we resolved a bunch of these issues so we could have a more healthy mortgage market,” the 55-year-old chief executive officer of JPMorgan Chase & Co. said today.

The patchwork of U.S. and international regulatory policies governing the housing and mortgage markets are hampering recovery here and abroad, Dimon said on a conference call with analysts after the New York-based bank released fourth-quarter earnings. In the U.S., state foreclosure laws conflict with a variety of federal policies on refinancing or modifying loans to troubled borrowers, Dimon said.

Leadership is needed to overhaul the industry, including reviving the market for private-label residential mortgage bonds and reforming regulations governing mortgage repurchases and foreclosures, he said.

“You could fix all this if someone was in charge,” Dimon said, tapping on the table for emphasis. “No one is in charge.”

Dimon didn’t suggest that he should be the one to take the job, nor did he say that he would want it.

Government Agencies

U.S. housing policy is set by federal, state and local agencies including the Federal Reserve, Federal Deposit Insurance Corp., Department of Housing and Urban Development, Federal Housing Finance Agency, Federal Housing Administration, Treasury Department, more than 50 state attorneys general and state bank supervisors, as well as local municipalities, which enforce foreclosure laws.

Some borrowers have been unable to get mortgages or refinance existing loans because lenders, along with Fannie Mae and Freddie Mac, which own or guarantee almost 50 percent of the U.S. mortgage market, have tightened underwriting standards to require higher credit scores and bigger downpayments.

After climbing to a peak of $11.2 trillion in 2007, total mortgage debt outstanding on single-family homes fell 7.4 percent to $10.3 trillion as of Sept. 30 as banks curtailed loans to consumers, according to Federal Reserve data.

AG Talks

The nation’s largest lenders, including JPMorgan, Bank of America Corp. and Citigroup Inc., are currently negotiating with state attorneys general to settle claims lenders improperly foreclosed on borrowers without the proper documentation.

Dimon also criticized U.S. and international policies that work against the goal of sparking an economic rebound.

“We’re shooting ourselves in the foot everywhere around the world,” Dimon said. “If you looked at the inconsistencies and the counter cyclical and pro-cyclical things, it’s crazy. It’s not the way to get a recovery going.”

While U.S. lawmakers and Obama administration officials criticize banks for failing to lend to consumers, he said banks are hamstrung by strict underwriting rules. It’s no better in Europe where central bank policy is sometimes at odds with local governments, further delaying recovery there and hampering job growth, according to Dimon.

“No one is really in charge of putting these things together and realizing the negative effects it’s causing,” Dimon said. Conflicting policies will make the recovery “more painful and slower,” he said. “We all want jobs. This is not job creating.”

ECB Praise

Dimon praised the European Central Bank’s move to provide three-year loans to the region’s banks and to accept a wider variety of collateral, saying the policy eliminated the risk a bank runs short of funds for at least the next year. European banks aren’t using the program to expand their purchases of sovereign debt or interbank lending because other regulators want banks to hold less of those assets, not more, Dimon said.

“It’s quite clear that regulatory policy, government policy, central bank policy, it’s not coordinated,” Dimon said. “It’s making the situation worse, not better. Basically, there’s no one in charge of the global financial system.”

–Editors: Steve Dickson, William Ahearn

NEW YORK/WASHINGTON (Reuters) – Federal regulators are considering trucking fresh water to households in a Pennsylvania town where residents say wells have been polluted by hydraulic fracturing, or fracking, for natural gas.

Only a month after declaring water in Dimock safe to drink, the Environmental Protection Agency is reconsidering action after residents supplied the EPA with hundreds of pages of data that link water pollution to fracking.

Two residents of Dimock, a town of some 1,400 in the northeast corner of Pennsylvania, told Reuters that the EPA said water would be delivered on Friday, but the agency indicated it was still considering the issue.

“No decision has been made by EPA to provide alternate sources of water,” an EPA spokeswoman said in an email on Friday. She added that the agency was trying to understand the situation in Dimock where state regulators recently halted deliveries of fresh water.

If the EPA delivers water to the village, it would be the clearest sign yet regulators are concerned about the effect of drilling on drinking water there.

Dimock may become pivotal in a national debate about the environmental impact of fracking, the drilling technique that could unlock decades’ worth of natural gas trapped in shale deposits, but which environmentalists say contaminates water supplies.

On Thursday, the EPA said it was considering doing its own tests on drinking water there after reviewing the evidence provided by residents that suggested that water could be more polluted than they realized.

Dimock residents began complaining of cloudy, foul-smelling water in 2008 after Cabot Oil & Gas Corp began fracking, which involves injecting chemical-laced water and sand into wells to release gas in shale rock deep below the surface.

Environmentalists say fracking pollutes fresh water as fluids seep from drilling wells into aquifers and other supply sources.

Cabot had trucked water to a dozen Dimock households for three years until November when state regulators agreed it could stop. Now residents are onto the last of their water. Some are using pondwater for showers.

Cabot denies polluting local water supplies.

“We still feel very comfortable that the water meets safe drinking water standards,” said Cabot spokesman George Stark. “We have a lot of data on well water there.”

As fracking increases in the United States and contributes to an energy boom, the EPA is conducting a national study to determine its impacts.

A recent EPA draft report showed that harmful chemicals from fracking fluids were likely present in a Wyoming aquifer near the town of Pavillion.

Industry denies that fracking, which is being done across the country, poses a threat to drinking water.

(Reporting By Edward McAllister in New York and Timothy Gardner in Washington; editing by Jim Marshall and Marguerita Choy)

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