Bad Mortgage, Foreclosure Processes Cost Banks $72 Billion (BAC, WFC, C, JPM)
The total cost to the five largest US banks of faulty mortgages and foreclosures now totals some $72 billion according to Bloomberg News. Bank of America Corp. (NYSE: BAC) gets over half the bad news with $41.8 billion of the…
The total cost to the five largest US banks of faulty mortgages and foreclosures now totals some $72 billion according to Bloomberg News. Bank of America Corp. (NYSE: BAC) gets over half the bad news with $41.8 billion of the total. Wells Fargo & Co. (NYSE: WFC) is on the hook for about $6 billion, Citigroup Inc. (NYSE: C) totals $3.61 billion, and JPMorgan Chase & Co. (NYSE: JPM) toted up $18.5 billion in expenses. Ally Financial accounts for the rest.
Most of the expenses are related to real-estate investors who found flaws in underwriting and false information about home values and borrower incomes in the mortgage-backed securities they bought. The banks are nearing a settlement rumored to be in the range of $25 billion with 40 states in the “robo-signing” of foreclosure documents.
Several large states, including California, Nevada, and New York, have yet to agree to be part of the proposed settlement.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.