Add yet another major settlement to the still-growing list of huge payouts by the nation’s largest banks to settle claims over toxic mortgage-backed securities. Bank of America has now agreed to pay $404 million to Freddie Mac to resolve all repurchase liabilities on home loans that it sold to the government-controlled mortgage company from 2000… Continue Reading
On Tuesday, the United States Justice Department announced that it finalized a settlement agreement with JPMorgan Chase for $13 billion. This settlement will resolve a multitude of state and federal investigations into JPMorgan Chase’s sale of residential mortgage-backed securities to investors between 2005 and 2008. In addition to paying fines for securities violations, the proceeds… Continue Reading
Under Threat of Having to Repurchase Thousands of Home Loans Sold to Freddie Mac Prior to January 1, 2009, Wells Fargo Agrees to Resolve all Remaining Claims in a Single $780-Million Cash Payment As of June 30 of this year, Wells Fargo & Co., this nation’s largest mortgage lender, had received demands to repurchase $1.4… Continue Reading
$968 Million Settlement During the aftermath of the financial crisis, Fannie Mae and Freddie Mac have been aggressively demanding that Wall Street and big bank aggregators repurchase millions of defaulted and distressed loans for alleged breaches of representations and warranties. In line with several recent blockbuster settlements with GSEs, Citigroup Inc. has agreed to pay… Continue Reading
Fannie’s Star Program reveals big banks failed to meet minimum mortgage servicer performance requirements According to a report released Tuesday by Fannie Mae, the big banks who love to act like “injured innocents” when it comes to making mortgage repurchase and indemnification demands on loan originators had their own substantial problems servicing the loans that they… Continue Reading
Judge Rakoff Not Going Out Quietly In a story we’ve been following since the outset, on Monday, Judge Rakoff filed his brief before the Second Circuit Court of Appeals. It is not every day that you see a federal judge litigating against two parties who were theoretically adverse before him. But that is precisely the… Continue Reading
SECOND CIRCUIT COURT OF APPEALS ISSUES STAY IN LITIGATION BETWEEN S.E.C. AND CITIGROUP In a sharply worded opinion, the Second Circuit Court of Appeals issued a stay to the district court proceedings in S.E.C. v. Citigroup, in the Southern District of New York. There, Judge Rakoff had previously refused to approve a proposed $285 million settlement… Continue Reading
The big banks are gearing up for an aggressive buyback season. We’ve recently learned that CitiGroup and Wells Fargo have set aside their largest reserves to date to cover new “repurchase” issues. Many expect insistent demands to rain down from Fannie and Freddie, as the mortgage giants face looming statute of limitations cut-offs for such claims.