E*Trade (NASDAQ:ETFC) did something odd. It made a former vice chairman of JP Morgan (NYSE:JPM) its new CEO. It would be tough to assume that he has much experience in the reduction brokerage industry. Donald Layton has been non-executive chairman of the company since Citadel Investment Group put $1.75 billion into the brokerage firm final November.

According to The Wall Street Journal “Citadel has nearly a 20% stake, and tapping Mr. Layton is a sign Citadel is getting antsy for results.” The brokerage firm still have $12 billion of home loans on its books. It is tough to assign them a value while real estate prices are still dropping and default

Citadel may want to sell the reduction brokerage firm but that would cause potential problems with other E*Trade investors. What would be left by is a company with a large pool of mortgages which are still falling in value. Getting a return on the reduction brokerage operation might be a good concept on paper but separating it from the balance of the company is no “slam dunk”. Shareholders don’t want to be left holding that mortgage bag.

Douglas A. McIntyre is an editor at 247wallst.com.

Original post by Douglas McIntyre

finance foreclosure debt consolidation tax child support refinance stocks mortgages debt auto insurance