Mortgage and Foreclosure Settlement Alert: J.P. Morgan, BofA, Citigroup, Wells Fargo
J.P. Morgan (NYSE:JPM): JPMorgan confirmed that it and four other firms have agreed to a settlement in principle with a number of federal and state government agencies, including the Department of Justice, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau and the State Attorneys General, relating to the servicing and origination of mortgages. The settlement calls for JP Morgan to: make cash payments of approximately $1.1B; provide approximately $500M of refinancing relief to certain borrowers whose loans are owned by the firm; provide approximately $3.7B of additional relief for certain borrowers. The global settlement releases the firm from further claims related to servicing activities, JPMorgan said. JPMorgan (NYSE:JPM) expects that the financial impact of the settlement on its financial results for Q1 and future periods to not be material.
Bank of America (NYSE:BAC): The Federal Reserve Board is issuing monetary sanctions against five banks totaling $766.5M as part of a broad settlement for unsafe and unsound processes and practices in residential mortgage loans servicing and foreclosure processing. The amounts of the monetary sanctions to be levied by the Board against the institutions include: Bank of America (NYSE:BAC) paying $175.5M in total, Wells Fargo (NYSE:WFC) paying $87M in total, JPMorgan Chase (NYSE:JPM) paying a $106.5M BHC penalty and a $168.5M servicer penalty for a total of $275M, Citigroup (NYSE:C) paying $22M in total, and Ally Financial paying a $17M BHC penalty and a $190M servicer penatly for a total of $207M.
Citigroup (NYSE:C): Rodrigo Zorrilla has been named COO of Citigroup’s (NYSE:C) Asia-Pacific region, Bloomberg reports. Anthony Nappi has been appointed Chief Administrative Officer for the region. The moves follow the appointment of Stephen Bird as sole CEO for the Asia-Pacific operations.
Wells Fargo (NYSE:WFC): Wells Fargo says $5.3B settlement does not result in current period charges. The company said that, as of December 31, 2011, the company had fully accrued for the Foreclosure Assistance Payment. Similarly, as of December 31, 2011, the expected impact of the Consumer Relief Program was covered in our allowance for credit losses and in the non-accretable difference relating to our purchased credit-impaired residential mortgage portfolio. The Refinance Program will not result in any current-period charge as the impact of this program will be recognized over a period of years in the form of lower interest income as qualified borrowers benefit from reduced interest rates on loans refinanced under the program.
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