JPMorgan Chase & Co. is winding down Plymouth Park Tax Services LLC, a business inherited from Bear Stearns & Co. that buys and collects delinquent property tax liens.
The unit, which uses the brand name XSPAND, will continue to service existing tax liens but will not take on any more business, JPMorgan Chase announced Friday. Plymouth Park was not a core business for JPMorgan's investment bank, says spokeswoman Jennifer Zuccarelli.
Bear started Plymouth Park in 1997. The unit would pay municipalities what they were owed and then seek to collect the debts with interest. According to JPMorgan Chase, XSPAND bought tax liens from municipalities in 19 states, generating more than $4 billion in revenue for those local governments over the unit's history.
But for JPMorgan Chase (which acquired Bear Stearns in a government-assisted fire sale in 2008) the juice apparently wasn't worth the squeeze in this niche business. (JPM is the nation's third largest residential servicer, according to figures compiled by National Mortgage News and the Quarterly Data Report.)
JPMorgan Chase has suffered PR headaches in its
"My guess is that there is an image issue," says James Cox, a Duke University School of Law professor who specializes in corporate and securities law. "But I also wonder about the returns. This has not turned out to be a market that produces the returns that they expect to be adequate compensation. … Even investment bankers are worried about their image."
