Phantom write-ups on distressed assets

May 28, 2009 | By Jim Kim

There's been a lot of talk recently about the "good news" that JPMorgan and other top banks will be able to write-up the value of distressed mortgages. The value of these write-ups across the industry could top $55 billion, according to some reports.

But The Motley Fool has cast some doubt on the looming write-ups when it comes to JPMorgan. It has fished out some old data that has led it to wonder if the distressed assets were marked down enough in the first place. These are assets that originated with Washington Mutual, which was bought by JPMorgan Chase. The website says, "There are two scenarios to explain this discrepancy: Either JPMorgan wrote down the loans at a rate that wasn't consistent with its own assumptions, or the future writeups being reported won't materialize."

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