Ref: under what circumstances would JPM be able to legally liquidate these loans and retain the proceeds?
Comments:
Banks, on and on going basis, manage / monitor asset to liability exposure. Portfolio Loans, ( retained "ON balance sheet ) that generally fall to the following categories:
1) Loans in default,
2) Collateral of Loans not of high quality - properyy market value deteriorating.
3) Loan to value exceeds Banks benchmark of acceptance.
Above exposure will generally trigger a bank to liquidate / sell loans. As to leave such loans on the books will required increased loan loss reserve and higher capital requirements.
The 60 to 100 billion seems like a lot but paramount to a bank is liquidity / credit risk management.