Posts Tagged ‘ jpmorgan chase ’

JPMorgan Chase Reaches $13B RMBS Settlement with U.S. Government

JPMorgan Chase Reaches $13B RMBS Settlement with U.S. Government


JPMorgan Chase has struck a deal with the U.S. Department of Justice to resolve civil claims from both federal and state officials over residential mortgage-backed securities (RMBS) issued prior to January 1, 2009, by the bank and two financial institutions it acquired in 2008–-Bear Stearns and Washington Mutual.

The $13 billion settlement is the largest in American history between the U.S. government and a single entity.

Under the agreement reached, JPMorgan will pay $9 billion in restitution and provide an additional $4 billion in relief for homeowners at risk of foreclosure and communities impacted by the housing crisis. Federal officials say the relief funding could benefit more than 100,000 borrowers.

According to JPMorgan, the cash portion of the settlement payment consists of a $2 billion civil monetary penalty and $7 billion in compensatory payments, including a previously announced $4 billion payment to resolve litigation claims from the Federal Housing Finance Agency.

Borrower relief will be in the form of principal reduction, forbearance, and other direct benefits from various relief programs, the bank explained. JPMorgan Chase has committed to complete delivery of the promised relief to borrowers before the end of 2017.

The settlement was negotiated through the Residential Mortgage-Backed Securities Working Group, a joint state and federal unit formed in 2012 by President Obama to investigate wrongdoing within the mortgage-backed securities market that helped to trigger, contribute to, or exacerbate the U.S. financial crisis.

New York Attorney General Eric T. Schneiderman co-chairs the RMBS Working Group. Tuesday’s settlement comes 13 months after Schneiderman sued JPMorgan for fraudulent RMBS packaged and sold by Bear Stearns before it was acquired by JPMorgan at the behest of government officials at the Federal Reserve, FDIC, and U.S. Treasury.

In announcing the unprecedented settlement, Schneiderman said, “Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy. This historic deal … is exactly what our working group was created to do.”

He continued, “We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten, and as a result we’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”

Separately, the FDIC announced Tuesday that it also reached a settlement with JPMorgan Chase and its affiliates in relation to the failure of six banks. The FDIC, acting as receiver for the failed institutions, says misrepresentations where made in the offering documents for 40 RMBS purchased by the now-defunct banks.

JPMorgan agreed to pay $515.4 million, which will be distributed among the receiverships for the failed Citizens National Bank (failed May 22, 2009), Strategic Capital Bank (May 22, 2009), Colonial Bank (August 14, 2009), Guaranty Bank (August 21, 2009), Irwin Union Bank and Trust Company (September 18, 2009), and United Western Bank (January 21, 2011).

From May 2012 to September 2012, the FDIC as receiver for five of the failed banks filed 10 lawsuits against JPMorgan, its affiliates, and other defendants for violations of federal and state securities laws in connection with the sale of RMBS.

As part of the global settlement reached, JPMorgan acknowledged it made serious, material misrepresentations to the public—including the investing public—about numerous RMBS transactions, according to a statement on the New York attorney general’s website.

JPMorgan Chase says it is fully reserved for this settlement.


Execs from Lending Community Hash Out QM Questions

Execs from Lending Community Hash Out QM Questions


When it comes to next year’s regulatory obstacles, CEOs and senior executives from the mortgage industry’s biggest players agree on one thing: Education will be key to keeping business going smoothly.

In a panel at the 2013 Realtors Conference and Expo, high-level names from Quicken Loans, Wells Fargo Home Mortgage, JP Morgan Chase, and Bank of America discussed the qualified mortgage (QM) guidelines, which go into effect in January 2014. While the initial implementation of these rules is expected to restrict lending to some buyers in the short-term, panelists agreed that business should even out over time.

Because the QM rule lays out specific criteria for accepted loans, it’s going to be more important than ever for lenders to retain significant documentation to back up their

underwriting decisions—something that professionals and consumers alike need to keep in mind, says Matt Vernon, home loan sales executive for BofA.

“It’s important for Realtors to be educated about the new documentation requirements so they can work with buyers and meet lender expectations,” Vernon said.

With a shortage of home inventory lifting competition in markets across the United States, one of the biggest concerns is the impact that more stringent standards will have on approval timelines. While timelines can vary depending on many factors, Vernon says the process is quicker and smoother when borrowers are educated about their lender’s application requirements.

Bill Emerson, CEO of Quicken Loans, agreed: “Our mission is to get someone approved. With clarity and transparency, buyers will know exactly what is needed of them. We want to do this in a manner that is as stress free as possible for consumers and Realtors.”

Despite the complications ahead, the leaders on the panel agreed that they expect a healthy improvement in the market next year, with purchase originations dominating the scene as interest rates rise and refinancing continues to trend downward.

“In spite of the economic crisis, Americans still want to be homeowners. That hasn’t changed one bit,” said Mike Heid, president of Wells Fargo Home Mortgage. “Homeownership is at the heart of what we do and that is worth preserving.”

Federal Court in North Carolina Dismisses ‘Fraud by Use of MERS’ Case

Federal Court in North Carolina Dismisses ‘Fraud by Use of MERS’ Case


Merscorp Holdings, Inc. announced Thursday that the U.S. District Court for the Eastern District of North Carolina ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS), JPMorgan Chase, and other MERS members in a recent case.

In James Porterfield vs. JPMorgan Chase Bank NA, Inc.MERS, et al, the borrower plaintiff brought several counts including “fraud by use of MERS,” alleging MERS could neither be a named beneficiary nor a nominee of a lender in the deed.

The plaintiff further claimed that the “the hidden purpose of MERS is to defraud borrowers and the clerks of court by hiding the true owners of secured interests on property in opposition to common law policies and the laws of North Carolina, and that all transfers of the deed or the note by MERS are void.”

The court found “despite the plaintiff’s contention to the contrary, the deed unequivocally identifies MERS and its position.” Additionally, Judge Terrence W. Boyle ruled that “the plaintiff has failed to uncover any case finding that MERS violates North Carolina law whereas several other courts have held that MERS is lawful and accordingly has the authority to assign it rights under deeds of trust.”

“This ruling serves as a reminder that prior case law has been settled. Courts have consistently found that MERS has authority to assign its rights under deeds of trust,” said Janis Smith, VP of corporate communications for Merscorp Holdings.

“MERS has legal authority to act on behalf of the lender—including the right to execute the assignment—and this authority is granted by plain language in the mortgage document signed at closing by the borrower,” Smith added.

Jury Returns Decision of Liability in BofA-Countrywide-Mairone Case

Jury Returns Decision of Liability in BofA-Countrywide-Mairone Case

10/23/2013 BY: CARRIE BAY

A 10-person panel of jurors is holding Bank of America and a mid-level manager liable for high-risk mortgages originated by Countrywide through a program known as Hustle and then sold off to Fannie Mae and Freddie Mac.

After hearing arguments for four weeks in a Manhattan federal court, the jury returned a decision finding BofA liable on one charge of fraud in the civil case and finding Rebecca Mairone, who worked for Countrywide from 2006 to 2008 as COO of one of its lending divisions, liable on the civil fraud charge she faced.

It’s among only a handful of cases stemming from the subprime and foreclosure crisis to go to trial and the first time an individual has been singled out as being responsible for personally contributing to the housing market’s implosion—and government officials are relishing the victory. “Bank of America chose to defend Countrywide’s conduct with all its might and money, claiming there was no case here. The jury disagreed,” said Preet Bharara, Manhattan U.S. attorney and the prosecutor in the case.

Bharara says the Hustle program treated quality control and underwriting “as a joke” and he faulted BofA and Mairone for “making disastrously bad loans and systematically removing quality checks in favor of its own balance.” He added, “In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis, Bank of America purchased Countrywide, thinking it had gobbled up a cash cow. That profit, however, was built on fraud.”

The case was decided nearly a year to the day after the U.S. Department of Justice filed its complaint, alleging Countrywide used the Hustle program to unload poorly underwritten mortgages to Fannie Mae and Freddie Mac, to the tune of $848.2 million in gross losses for the GSEs, according to court documents. Mairone was added as a co-defendant in January because in her position, she was responsible for managing the High Speed Swim Lane program, or Hustle.

For five years, though, state and federal officials have neglected to go after subprime kingpin and Countrywide CEO Angelo Mozilo, who despite his track record has escaped any and all repercussions related to his mortgage dealings and been subject only to a fine for insider trading—of which he only had to pay two-thirds. Instead, U.S. Attorney Preet Bharara zeroed in on a mortgage exec who’s still visible in the marketplace and whose tenure with Countrywide was short-lived and low-profile.

Mairone, who is now a home lending executive with JPMorgan Chase, became part of the Bank of America team when it acquired Countrywide in 2008, and she’s spent the better part of her career laboring to keep financially distressed borrowers in their homes.

For nearly two years, she was BofA’s national default servicing executive, overseeing loss mitigation and foreclosure prevention efforts for hundreds of thousands of distressed homeowners. In 2011, Mairone was named Bank of America’s national mortgage outreach executive. Under her supervision, the company doubled its outreach staff, opened dozens of regional customer assistance centers in hard-hit markets, and hosted and participated in hundreds of local home preservation workshops with Mairone herself traveling from city to city to ensure homeowners attending the events got the assistance they needed.

A court date of December 5 has been set to begin the penalty phase of the case. Ultimately, the decision of how much BofA and Mairone will be fined is in the hands of U.S. District Judge Jed S. Rakoff, a court official well-known for his tough stance against banks and the financial services industry.

Chase Hits Major Milestone in Home Donation Program

Chase Hits Major Milestone in Home Donation Program


The dollar volume of homes donated or sold at a discount through JPMorgan Chase’s Community Revitalization Program has crossed the $250 million mark.

Initiated in 2009 as an effort to help customers and communities cope with the housing crisis, the program has seen more than 5,300 properties donated or sold to nonprofit housing organizations over the last few years. The numbers average out to about three properties a day.

Additionally, Chase pledged in 2011 to award 1,000 mortgage-free homes to military families by 2016. Since then, the company has provided over 600 mortgage-free homes amounting to more than $62 million.

“Chase has a long history and commitment to helping build vibrant communities through a variety of corporate-wide programs,” said Ryan Crowley, head of Chase Government and Community Partnerships.

“By responsibly donating about three homes a day through this initiative,” Crowley continued, “Chase’s efforts have rehabilitated communities, spurred job growth and provided homes for thousands of low-to-moderate income families.”

More than 450 organizations participate in Chase’s programs by renovating the homes before donating, reselling, or retaining them for future use. Chase continues to help by conducting post-renovation property inspections, tracking title filing, and insuring homes are sold within program parameters.

“We are very proud of our relationship with JPMorgan Chase,” said Lot Diaz, VP of housing and community development for the National Council of La Raza.

“Such partnerships, between the for-profit and non-profit sectors, shows that we all need to work together to further the national effort to stabilize housing in our communities,” Diaz added.


Real Estate Professionals Must Battle Foreclosure ‘Zombies’ to Survive

Real Estate Professionals Must Battle Foreclosure ‘Zombies’ to Survive


As home prices improve and headlines spell out recovery, those on the ground in housing markets across the country are encountering a new threat: “zombies.”

These so-called “zombie” foreclosures take place when a bank initiates foreclosure on a property but then abandons the process, leaving the property in a sort-of no-man’s land—vacant but not for sale.

According to RealtyTrac, there are about 167,000 properties nationwide that fall into this category. In addition, the company says there are hundreds of thousands of unlisted REOs and even more properties winding through lengthy judicial foreclosure procedures.

“Unlisted foreclosures and bank walkaways used to be extremely rare, but they have mushroomed recently, ballooning into a large number of homes stuck in foreclosure limbo, sometimes for years,” RealtyTrac stated in its most recent issue of Foreclosure Report News.

Bank of America has 23,966 foreclosure “zombies,” the most held by any bank, according to RealtyTrac.

Wells Fargo is not far behind with 22,968, and JPMorgan Chase holds the third-highest inventory of foreclosure “zombies”-16,054 by RealtyTrac’s count.

With 55,503, Florida is home to the highest number of unoccupied “zombie” properties.

In total, RealtyTrac estimates there are about 1 million vacant homes that need to be sold but are currently out of reach for most real estate agents.

Meanwhile, real estate markets across the country are dealing with inventory shortages.

The shortages, combined with high investor activity, have caused price surges in several markets. In fact, some real estate professionals worry that investors have crowded out traditional buyers and artificially inflated property values in some areas.

“It’s not rocket science to predict what will happen next,” said Steve Hawks of Platinum Real Estate Professionals in Henderson, Nevada.

He says Las Vegas “will see another 20 percent appreciation in prices over the next nine months. Vacant homes and delinquent loans will be converted to available inventory in the second half of 2014. And the second bubble pop in less than a decade will begin.”

“Only stupid money is buying now,” Hawks said.

A full 8 percent of single-family homes in the Las Vegas metro-about 40,000 properties-are vacant, according to data from the Lied Institute at the University of Las Vegas.

RealtyTrac says agents hoping to survive in today’s zombie-land must form relationships with banks, private lenders, the GSEs, and distressed borrowers to dig into the shadow inventory and zombie population in order to bring markets back to life.

EverBank to Provide $37M to Borrowers in Foreclosure Review Deal

EverBank to Provide $37M to Borrowers in Foreclosure Review Deal

08/23/2013 BY: ESTHER CHO

EverBank came to an agreement with federal regulators to provide $37 million in relief payments to certain borrowers, leading to an end to the Independent Foreclosure Review process for the bank, the Office of the Comptroller of the Currency (OCC) said Friday.

The payment should cover 32,000 eligible mortgage customers whose homes were in any stage of foreclosure in 2009 and 2010, and checks should range from $1,050 to $125,000.

Eligible borrowers will be contacted directly. The release did not specify when the payments will be sent, but did say more information about payments will be announced in the “near future.”

The Jacksonville, Florida-based bank will also pay about $6.3 million to HUD-certified organizations or other groups dedicated to providing affordable housing and preventing foreclosure.

Additionally, EverBank is required to evaluate borrowers in foreclosure for a loan modification and create a special complaint process to resolve borrower complaints concerning credit report errors.

The OCC and the Federal Reserve have already come to separate foreclosure deals with 14 other banks, which included Aurora Bank, Bank of America, Citibank, GMAC Mortgage, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

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