More JP

Posted by kevin on October 19, 2013 under Foreclosure Blog | Comments are off for this article

In our last episode, JP Morgan Chase and the Feds were talking in terms of an $11 billion settlement of the various claims against JP Morgan. Yesterday, the Wall Street Journal reported that JP Morgan settled with the FHFA for $4 billion based on misrepresentations concerning the quality of mortgages underlying bonds sold to Fannie and Freddie. Bloomberg has just come out with a story that says that JP Morgan is in the process of finalizing a $13 billion settlement with the Feds (includes the $4 billion to FHFA) which will cover all Federal claims (except possible criminal action against individuals) and all claims being raised by NY AG Eric Schneiderman.

Nothing in either report indicates whether and how much of the settlement will be used for loan modifications.

JP Morgan took a $7.2 billion charge against 3d quarter earnings relating to legal issues. Clearly, the bank is trying to rapidly put its legal problems and the money associated therewith behind it so that it could move forward. The Bloomberg piece says that not only has Jaime Dimon, the CEO of JP Morgan, and Eric Holder, the US Attorney General.

We can expect confirmation of the settlement with all of its terms within the next few days.

JP Morgan Settlement?

Posted by kevin on November 13, 2012 under Foreclosure Blog | Comments are off for this article

On October 2, 2012, I blogged that the NY AG, Eric Schneiderman, sued JP Morgan, purchaser of the imploded Bear Stearns based on BS’s sale of mortgage backed securities. Yesterday, it was reported that the SEC’s staff recommended settlement will with JP Morgan based on the BS mortgage backed securities and will not bring charges against individuals. The dollar amount of the “slap on the wrist” has not been set but JP Morgan will not be required to admit to any wrongdoing. Looks like an investigation into the same areas that Schneiderman is tackling in his lawsuit. How will this impact on the Schneiderman lawsuit considering that Schneiderman and SEC enforcement chief, Robert Khazami, are both on the federal mortgage task force that President Obama announced with great fanfare at his last State of the Union message (but did nothing until just before the election..

What is the purpose of the various investigations? Is it to make a news splash and then get some settlement money out of the “too big to fail” banks that pretty much ruined our economy. Or is it to get to the bottom of this mess, gets the facts and punish the wrongdoers? It looks like the SEC staff does not have the stomach to do the latter. Where do these staff members go to work after they leave government service? I hate to sound cynical but I am sure that it is not some consumer non profit.

So, what is going to happen with the lawsuit brought by Schneiderman? Another quick settlement with check written but no real investigation and no punishment of the bad guys? We shall see. It would be a shame if Schneiderman follows suit with the SEC staff.