Tag Archives: JPMorgan Chase

Senators and banks across the country are joining forces in order to provide mortgage protection for members of the military. After reports that some members of the military and their families are struggling to remain in their homes, senators announced an act to protect servicemembers from abuses. In a similar effort, two of the top servicers have announced plans to help protect members of the military from foreclosure and high credit costs.

Another lawsuit may join the ranks of suits against banking executives for their part in the housing collapse. There are reports that the Federal Deposit Insurance Corporation (FDIC) is said to be considering a lawsuit against former executives of the now defunct Washington Mutual bank, for alleged fraudulent lending practices. The government agency may seek up to $1 billion in damages. The FDIC took control of Washington Mutual and sold it to JPMorgan Chase for $1.8 billion in 2008.

When evidence surfaced last fall of flawed foreclosure documentation and robo-signers within some of the nation's largest servicing shops, federal regulators launched an investigation into the foreclosure and servicing practices of 14 companies. Officials say they've uncovered ""critical deficiencies and shortcomings"" and will be enforcing sanctions and penalties against servicers and developing a set of national mortgage servicing standards for the industry.

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

Last week, the special inspector general for the Troubled Asset Relief Program, released a report to Congress saying servicers are not doing all they can to help facilitate the process of keeping borrowers in their homes. To date there have been 1,025,907 homeowners rejected for HAMP modifications by the eight largest servicers, and there have been 572,655 canceled trial modifications, which typically occurs because of insufficient documentation, program ineligibility, or because the borrower missed payments.

A recent report by Institutional Risk Analytics (IRA) says Bank of America and Wells Fargo are two of the most sued financial service firms in the United States. IRA says that mortgage exposure is what is causing these two banks and others in similar situations to be embroiled in so many federal legal cases. In addition, the firm points to the added burden many of these companies are also facing in litigation that will not reach federal court, such as cases involving foreclosure practices.

JPMorgan Chase kicked off of the earnings reporting season among major U.S. lenders Friday. The company reported net income of $17.4 billion for the full-year 2010, an increase of 48 percent compared with $11.7 billion for the prior year. During the fourth-quarter period, the financial institution brought in net income of $4.8 billion. Earnings per share were $1.12 in Q4. CEO Jamie Dimon described the company's performance as ""solid,"" but he says its mortgage business continues to be a ""significant drag on returns.""

In November after the robo-signing scandal broke, New York City Comptroller John C. Liu, on behalf of the New York City Pension Funds, called on the directors at Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo - which together service more than half of the nation's mortgages - to conduct an independent audit of their foreclosure practices. This week, Liu issued a demand for the banks to immediately follow through on that request, this time backed by 11 major public pension funds from several states.

New data from federal regulators show that the nation's largest banks and thrifts repossessed nearly 187,000 homes during the third quarter of 2010. The number of foreclosures completed during the three-month period is up 57.5 percent from a year earlier. The report shows that new foreclosures initiated also rose to more than 382,000. Although foreclosure activity increased during the quarter, servicers reported almost twice as many home retention actions as completed home forfeiture actions.

The Securities and Exchange Commission (SEC) is reportedly investigating lenders' procedures for packaging home mortgages into securities bonds for sale to investors. Reuters, citing two sources familiar with the probe, says the SEC sent subpoenas last week to Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Wells Fargo. The subpoenas focus on the earliest stage of the mortgage securitization process, in particular, the role of master servicers.