This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Billions More in Mortgage Penalties Coming: Federal Regulator

Stocks in this article: BAC JPM FNMA FMCC

Updated from 2:46 p.m. to include additional details in third and fourth paragraphs.

NEW YORK ( TheStreet) -- A working group of federal and state authorities responsible for extracting a $13 billion settlement from JPMorgan Chase late last year over abuses tied to mortgage bonds still has "more than a dozen ongoing investigations," which will lead to billions of dollars in additional costs to financial companies, according to Michael P. Stephens, Acting Inspector General of the Federal Housing Finance Authority.

Mortgage-related investigations stemming from the financial crisis are "in the fifth inning," Stephens said Wednesday at a Mortgage Bankers Association conference in New York.

Stephens expressed some surprise about complaints in the press that there have not been convictions of executives tied to the mortgage crisis. Between the 10 years he spent as inspector general of the U.S. Department of Housing and Urban Development and his current tenure at FHFA, "hundreds and hundreds of people have been indicted and convicted of some form of mortgage fraud," he said.

"In the last six months my organization has indicted 82 people," he said. "Three of those people committed suicide recently. Why do I bring that up? Most of the people that we deal with are not hardened criminals. They're white collar. They're highly educated. They belong to churches. They have no prior arrest records. They're pillars of society. They're all making tremendous amounts of money and when they do get caught it's a little bit more difficult for them to take it than a street criminal."

Stephens' office is part of a residential mortgage backed securities (RMBS) working group announced by President Obama in his 2012 State of the Union Address.  Though Obama announced the group would be led by New York State Attorney General Eric Schneiderman, the group "is housed in my office," Stephens said Wednesday.

"Since its organization, we've been a very active member of the working group. Our activities have included providing expertise and assistance to members of the working group on investigative strategies, litigation and securitization matters [and] providing law enforcement agents and investigative attorneys to assist with investigations," Stephens said.

The deal with JPMorgan last year covered all civil claims by government authorities related to residential mortgage-backed securities (RMBS) sales by JPMorgan, Bear Stearns and Washington Mutual before 2009.

Separate from the working group, Fannie Mae and Freddie Mac have recovered some $20 billion from banks tied to RMBS that were supposed to be guaranteed by the government sponsored enterprises. The FHFA, Fannie and Freddie's regulator and conservator, forced the banks to buy back the loans since they were fraudulent or otherwise didn't live up to their original billing. Such deals include a $9.35 billion deal with Bank of America  (BAC) announced in March and a $5.1 billion deal with JPMorgan in October. 
Follow @dan_freed

>>>Read More: Obama's Mortgage Fraud Unit Forms 

>>>Read More: Schneiderman Details $13B JPMorgan Settlement 

 

 

 

 

 

 

 

 

 

 

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs