JPMorgan Chase May Be Penalized in Madoff Case

JPMorgan Chase May Be Penalized in Madoff Case

JP Morgan Chase, America’s biggest bank, may face action from federal authorities who suspect that the bank “turned a blind eye” to Bernie Madoff’s massive Ponzi scheme, reports The New York Times. This case comes right after the bank reached a tentative $13 billion settlement with federal prosecutors over the sale of flawed mortgage products. ABC News has confirmed that prosecutors and JPMorgan have held preliminary discussions about a so-called deferred prosecution agreement. This arrangement would suspend criminal charges in exchange for a fine and other concessions. 

“We’re not commenting today other than to point people to our many previous statements where we’ve said that “all of our personnel acted in good faith,’” the bank said in a statement today.

JPMorgan’s $31 Billion In Legal Costs Prove It’s Just Too Big

JPMorgan’s $31 Billion In Legal Costs Prove It’s Just Too Big

JPMorgan Chase has racked up more than $31 billion in fines, penalties and legal settlements since 2009, according to a rough tally by The Huffington Post — evidence the bank is too big to be safely managed.

Citigroup Said to Offer Servicing on $63 Billion Mortgages

Citigroup Said to Offer Servicing on $63 Billion Mortgages

Oct. 24 (Bloomberg) — Citigroup Inc., the third-biggest U.S. bank, is selling mortgage-servicing rights on $63 billion of loans, its largest potential sale of this type since the 2008 financial crisis, according to two people briefed on the offer.

The servicing rights, or MSRs, represent about 21 percent of Citigroup’s total contracts as of midyear, and could be sold in pieces, said the people, who asked not to be identified because the sale is private. More than 80 percent of the loans are performing, according to the people.

DOJ investigates nine additional banks over MBS

At least nine additional banks face investigations by theU.S. Department of Justice into their sales of mortgage-backed securities as part of an effort by the task force that reached a $13 billion pact with JPMorgan Chase (JPM).

Thse investigations, which span U.S. attorney’s offices from California to Massachusetts, include the largest banks that underwrote and sold residential mortgage-backed securities. They include Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland, UBS and Wells Fargo.

Most of the probes are looking for civil violations for allegedly misleading buyers of RMBS, not criminal sanctions. It is not clear how many, if any, will result in lawsuits or settlements.

Source: CNBC

Bank of America cuts 3,000 mortgage positions

According to The Wall Street Journal, Bank of America(BAC) plans to slash another 3,000 mortgage jobs in the fourth quarter as it seeks to cut expenses in response to a drop in refinancing and within its delinquent loan portfolio.

The bank notified about 1,200 employees Thursday in its legacy mortgage group and its home loans fulfillment unit that they will be let go, said a person familiar with the matter. The bank is also aiming to cut a total of 3,000 jobs in its legacy asset servicing group, the unit that manages the bank’s mortgage portfolio. That unit doesn’t originate loans, but services both current and delinquent loans.

The majority of the jobs cut will come from temporary contracting companies, the people said. The exact breakdown hasn’t been decided, one of the people said.

Source: WSJ