That talk about the JPMorgan Chase & Co (JPM)settlement being the end of the road? Think again. Credit rating agency Standard & Poor’s said today that they expect U.S. Banks will have to pay between $56.5 billion and up to $104 billion to put their legacy mortgage issues behind them:
Payments at the upper end of the estimates would wipe out about two-thirds of the $154.9bn litigation buffer estimated to be held by the banks but would not cut into their regulatory capital.
Large US banks have increased their reserves in the face of a new wave of lawsuits from investors who are clubbing together to argue they have lost money from buying mortgage-backed securities comprised of bad loans.