Financial Sector Review: 5 Big Banks Reach $25B Agreement, Goldman Sachs
Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC): U.S. Attorney General Eric Holder, Department of Housing and Urban Development Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced that the federal government and 49 state attorneys general have reached a landmark $25B agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The joint federal-state group entered into the agreement with the nation’s five largest mortgage servicers: Bank of America Corporation (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup (NYSE:C) and Ally Financial, formerly GMAC. The joint federal-state agreement requires servicers to implement comprehensive new mortgage loan servicing standards and to commit $25 billion to resolve violations of state and federal law. Under the terms of the agreement, the servicers are required to collectively dedicate $20B toward various forms of financial relief to borrowers. Mortgage servicers are required to fulfill these obligations within three years. In addition to the $20 billion in financial relief for borrowers, the agreement requires the servicers to pay $5B in cash to the federal and state governments.
BAC shares closed at $8.18, up $0.05, or 0.62%, on the day. Its market capitalization is $86.18 billion.
C shares closed at $33.66, down $0.57, or 1.67%, on the day. Its market capitalization is $98.42 billion.
JPM shares closed at $37.86, down $0.44, or 1.15%, on the day. Its market capitalization is $142.83 billion.
WFC shares closed at $30.58, down $0.05, or 0.16%, on the day. Its market capitalization is $160.93 billion.
Goldman Sachs Group, Inc. (NYSE:GS) won the auction for a large bundle of risky mortgage bonds from the 2008 bailout of American International Group (NYSE:AIG) with an unpaid principal balance of $6.2B, in a sale that was a victory for the firm and the Federal Reserve Bank of New York, reports the Wall Street Journal. That represented half the remaining assets in a vehicle called Maiden Lane II. The sale price has not yet been disclosed.
The shares closed at $115.88, down $0.27, or 0.23%, on the day. Its market capitalization is $57.05 billion.
Want news like this in real-time so you can get an edge? Click here for Wall St. Cheat Sheet Pro.