Lawsuits on mortgage trustees are just starting. According to Bloomberg, US Bank, Bank of New York Mellon (BK), Deutsche Bank (DB), Wells Fargo (WFC), HSBC (HSBC), Bank of America and Citigroup (C) are the major mortgage trustees. Bloomberg speculates that since these institutions didn't underwrite, sell, securitize, service, or ship loans according to regulations, the odds are low that the trust departments got it right. So far, Schnedierman has requested documents from Deutsche Bank and Bank of New York Mellon.
In early September the Federal Housing Finance Agency (FHFA), the receiver for FNMA and FHLMC, sued Bank of America, Citigroup, JPMorgan Chase (JPM), Barclays (BCS), HSBC, Credit Suisse (CS), and Nomura Holdings demanding refunds from these institutions for loans sold to FNMA and FHLMC that were based on false or missing information about the borrowers or the properties. The FHFA said that the two mortgage giants purchased $6 billion from Bank of America, $24.8 billion from Merrill Lynchwhich is now owned by Bank of America, and $3.5 billion from Citigroup.
Lawsuits and foreclosure issues are making the TBTF banks sorry they are in the mortgage business. JPMorgan's Dimon announced that they are going to be leaving the mortgage business, and Bank of America that by year's end, they will stop buying mortgages from correspondents.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV