U.S. housing regulators seek over $6 billion from BofA: FT

(Reuters) - U.S. housing regulators are looking to fine Bank of America more than $6 billion for its role in misleading mortgage agencies during the housing boom, compared with the $4 billion to be paid by JPMorgan Chase & Co, the Financial Times reported on its website, citing people familiar with the matter.

The FT said the Federal Housing Finance Agency (FHFA), pursuing claims on behalf of finance agencies Fannie Mae and Freddie Mac that back about half the existing U.S. home loans, are seeking the penalty. (link.reuters.com/muc93v)

FHFA and Bank of America (BofA) could not be reached for comment outside of regular businesshours.

Countrywide Financial Corp, the mortgage lender acquired by BofA in July 2008, has cost the bank more than $40 billion in litigation expenses and other charges linked to its bad subprime mortgages. The bank set aside an additional $300 million for mortgage litigation in the latest quarter.

JPMorgan reached a tentative $4 billion deal with the FHFA on Friday to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold them, according to a person familiar with the matter.

JPMorgan also reached a tentative $13 billion deal with the U.S. Justice Department and other government agencies to settle investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source familiar with the talks told Reuters on Saturday.

Via: Reuters

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US 'Robbed' JPMorgan, Payback for Criticism of Obama

Sunday's New York Post page one headline about JPMorgan's fine screamed "Uncle Scam" with the sub headline "U.S. Robs Bank of $13B."

Wall Street went into a tizzy this weekend with the news that one of the nation's biggest banks agreed to fork over to the federal government $13 billion in fines related to its mortgage securities business.

The Post quoted bank analyst Dick Bove of Rafferty Capital as saying the deal "is a basic and fundamental attack on capitalism."

"It is possible that the government is taking away the property of the JPMorgan shareholders without the shareholders having committed any crime or having any say in the expropriation of these funds," Bove told the New York Post.

The deal, announced Saturday, settles civil penalties with the U.S. Justice Department, but doesn't stop any potential criminal prosecution. The Federal Housing Finance Agency sued JPMorgan and 17 other banks for faulty mortgage bonds two years ago.

Wall Street insiders were furious about the deal, noting that 80 percent of the mortgages being probed were actually acquired from the failing banks Washington Mutual and Bear Stearns. JPMorgan reportedly took over the risky portfolio at the request of the U.S. government in the wake of the 2008-09 financial meltdown.

“I just think that these banks like JPMorgan are being whacked like a pinata,” hedge-fund manager Doug Kass, told the Post. "Ultimately, the earnings power of banks is being regulated out of them from the [Securities and Exchange Commission], from the Department of Justice."

The settlement deal was sealed this past Friday night in a telephone call between Attorney General Eric Holder and JPMorgan CEO Jamie Dimon.

Politico noted that Dimon was once considered "one of President Barack Obama’s most prominent Wall Street friends." A Democrat and one-time Obama donor, he was also a frequent visitor to the White House and praised by Obama himself as the "one of the smartest bankers we got."

Via: Newsmax

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