mortgage

$153.6 million fine would be paid by JPMorgan Chase & Co to settle the litigation with the US Securities and Exchange Commission. The SEC accused the banking giant of defrauding investors who bought mortgage securities sold just before the nation's housing market collapsed.

The regulator supported its arguments in the complaint with the excerpts from internal communications of JPMorgan that showed bankers sold a collateralized mortgage obligation in 2007 to ensure that it could get credit-scarred mortgage securities off its books.

Bank of America is accused of hindering the US regulators to review foreclosure practices of the company, says the court filing.

The mortgage practices of BofA have been investigated by federal regulators and state attorneys general including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.

The Department of Housing and Urban Development inspector general's office conducted a review of the five largest mortgage servicers, including Bank of America, which is the biggest.

The Financial Times reported that Bank of America Corp plans to decrease its $850 billion portfolio of troubled home loans by about half within the following three years. However, the company spokespersons failed to detail what exactly the company would do to achieve this goal.

The company suffered hard times due to the housing crisis and the purchase of Countrywide Financial. Last month, Bank of America posted an unexpectedly sharp drop in first-quarter profit as higher expenses from delayed home foreclosures weighed on its mortgage business.

According to the report released by the Federal Reserve the financial system purportedly continued its pace towards healing from credit crisis. The survey polled senior bank executives who reported an increased demand for commercial real estate loans even though there was a significant damage caused to residential housing markets where demand for mortgages declined.

But banks have been cautious about lending and consumers wary of piling on debt, and the data showed there was still some ways to go before credit conditions return to normal.

Bank of America has announced its intention to open two customer assistance centers in the Detroit area to help mortgage and other credit customers who have financial problems. The location for the offices will be will be identified within 3 months. Also it was said that Bank of America will support the “Project 14” initiative for affordable homeownership. The financial giant is to donate and refurbish 10 vacant homes for that program.

The US Federal Reserve ordered Bank of America to adjust its plans for a modest dividend increase, which is a sign that regulators see the bank as being still financially weaker than other financial institutions.

BofA’s plans were to get into the second wave of banks raising dividends in the second half of this year. In comparison with its rivals like JPMorgan Chase & Co and Wells Fargo, Bank of America has less capital and is still heavily struggling to remain consistent.

A new settlement is being promoted by the Obama administration to force the largest US banks to pay for reductions in loan principal worth billions of dollars following breakdowns in mortgage servicing.

According to the Wall Street Journal report if the settlement is reached some state attorneys general are also pushing for banks to pay more than $20 billion of civil fines or to fund a similar amount of loan modifications for troubled borrowers.

It takes longer time for Bank of America to answer phone calls from borrowers with distressed home loans. Besides, the bank loses more calls too, as reported by six months of Treasury Department reports.

The answering time for BofA has averaged 40 seconds or more each month since May when the US Treasury started collecting call-center data from the eight largest servicers in its mortgage modification program. Thus, BofA, the largest U.S. bank and the largest mortgage servicer, had the slowest answering speed in four of the six months.

Bank of America Corp has put up at least $1 billion worth of toxic mortgage assets for sale according to media reports.

Players can place their bids by the end of December for the assets which among other things include already written-off loans and mortgage-servicing rights.

The asset sale is part of a larger effort by the bank to unwind a trove of assets in the wake of the purchases of Countrywide Financial and Merrill Lynch.
 

The US second largest provider of funding for home mortgages Freddie Mac plans to lift some fees on loans it finances which shows there are greater risks even for borrowers making regular payments.

In the bulletin released this week the mortgage giant says it will some so-called "delivery fees" in March to cover increased risks on loans covering large portions of a property's value. The fees are charged to lenders, but will likely raise costs on many loans for both purchases and refinancings, including those already funded by Freddie Mac.

Google is participating in a provision of affordable housing for low-income families. U.S. Bancorp Community Development Corporation (USBCDC), a division of U.S. Bank, announced it will manage an $86 million Low-Income Housing Tax Credit (LIHTC) fund for Google. The fund will be a major source of funding for the construction and operation of 480 affordable rental housing units for low income families and senior citizens in seven communities throughout the West and Midwest, U.S. Bank says.

Fannie Mae has announced its intention to punish those borrowers who try to escape from paying mortgages they can afford. According to the company representative now the company will disqualify those “strategic defaulters” for 7 years for the new Fannie Mae-backed loans, reports USA TODAY.

The bill has already been submitted to the House for approval. If approved the Federal Housing Administration would be barred from insuring mortgages for the borrowers who had an opportunity but failed to pay.  

Fannie Mae and Freddie Mac have been delisted from the New York Stock Exchange as their shares fell too below the minimum requirement of the exchange.

Freddie Mac's common stock, now unlisted, will trade under the symbol "FMCC." Investors will be able to trade Freddie Mac's 20 classes of preferred stock.

Fannie Mae's common stock will trade under the symbol "FNMA." Its preferred shares also will be listed.

American taxpayers who are at present about to pay some $145 billion in housing losses connected to Fannie Mae and Freddie Mac loans may face higher bill to cover the debt of the mortgage giants.

According to the Congressional Budget Office, the losses could balloon to $400 billion. And if housing prices fall further, the cost to the taxpayer could hit as much as $1 trillion.

This week Morgan Stanley agreed to pay $102 million to end an investigation launched by Massachusetts prosecutors into the company’s unfair and deceptive lending practices.

According to the statement of Martha Coakley, the state's attorney general, Morgan Stanley which funded subprime loans throughout the country, improperly loaned billions of dollars to New Century which then sold loans to unqualified borrowers in the state. Morgan Stanley also packaged these risky loans and sold them to big investors like pension funds.