‘ Bank of America Offers to pay £13 Billion to Settle Investigation into its Sales of Mortgage-Backed Securities ‘

#AceFinanceNewsUNITED STATES (Wall Street) – July 16 – Bank of America has offered to pay $13 billion to settle an investigation into its sales of mortgage-backed securities (MPA) 

060614bank

060614bank


Citing people familiar with the matter, the Wall Street Journal reported that the bank met with the Justice Department Tuesday. The meeting did not yield any progress toward a final deal, however.
Bank of America had previously offered $12 billion to settle the probe. The DOJ countered with a $17 billion settlement, according to Reuters.Talks between the bank and the government have been acrimonious. Bank of America CEO Brian Moynihan requested to meet with Attorney General Eric Holder last month to hash out a deal, but Holder refused, saying the parties were too far apart for the talks to be productive.

At $13 billion, the bank’s offer would equal the payoutagreed to last year by JPMorgan. That settlement was the largest with a single entity in US history.
JP Morgan

(IBTimes October 20 2013) Reported that JPMorgan has agreed to pay one of the largest financial penalties in history after sealing a tentative $13bn deal with the US Department of Justice to put an end to a raft of government mortgage product related probes.According to sources cited by Reuters, although JPM has reached a bumper deal with authorities, the investment banking giant is not free of criminal liability and will have to continue to cooperate in criminal inquiries into individuals involved in the conduct at issue.At the beginning of the month, JPM’s  chief executive Jamie Dimon met US Attorney General Eric Holder to thrash out an original $11bn (£6.8bn, €8bn) deal to end the raft of mortgage-securities investigations in the investment bank.The bank already stumped up nearly $1bn in fines related to the London Whale trading scandal, which has cost the bank billions of dollars in legal losses.

On the same day JPM was ordered to refund $300m to customers after US regulators ruled that two million clients were harmed by the bank’s debt collection and other credit card practices.

Regulators also said that there were errors in the way the investment bank pursued customers through the court. However the refund order is not a fine, so regulators and prosecutors can still slap JPM with financial penalties in the future.

Only a few days ago, JPM revealed being hit by $9.2bn worth of legal expenses which resulted in the US banking giant posting its first ever quarterly loss under chief executive Dimon.

The legal expenses, which worked out as $7.2bn after taxes, include money JPM is setting aside for future settlements with authorities.

“While we expect our litigation costs should abate and normalise over time, they may continue to be volatile over the next several quarters,” said Dimon in a statement.

JPM was not ready to avail for comment at the time of publication. 
 

#bank-of-america, #brian-moynihan, #eric-holder, #jamie-dimon, #jpm, #jpmorgan-chase, #wall-street, #wall-street-journal

” JP Morgan Denied `Sberbank and VTB’ the right to make `Transactions’ of Customer Payments”

#AceFinanceNews says according to latest reports in MOSCOW, February 06. /ITAR-TASS/. US regulators’ struggle for a clear banking system caught up with the major Russian market players. According to Kommersant daily, JP Morgan denied Sberbank and VTB the right to make transactions of customer payments since the US bank revised approach transparency of operations.

JP Morgan Meanwhile, JP Morgan is not as suspicious about most of other Russian banks — obviously, according to the law of large numbers, the paper says.

According to the paper’s source, the US partner notified the banks of ceasing their operations with customer payments, though continued its own treasury transactions with Sberbank and VTB.

In effect, the paper says, the banks transferred all customer transactions to Bank of America and Bank of New York (Sberbank) and Citi and Bank of America (VTB). VTB is going to take treasury transactions out of JP Morgan, whereas Sberbank plans to continue such partnership.

Actions of JP Morgan, which is one the banks that leads by the number of the US authorities’ complaints, are comprehensible. Last year alone JP Morgan paid financial regulators about $20 billion for various violations on mortgage-backed securities. This year the bank is to pay another fine of $2.6 billion for failure to notify the authorities of suspicious customer transactions. Under such circumstances, the bank’s selective refusal to cooperate raised eyebrows in the market as procedure remained unchanged for a number of other Russian banks holding correspondent accounts in JP Morgan.

It may be the business scale of the Russian leading banks that caused such a coolness in JP Morgan attitude, the paper says.

Along with the maximal number of customer transactions as compared to other Russian banks, Sberbank and VTB carry out a large number of operations in the interests of smaller banks holding correspondent accounts in these banks and unable to open them in US banks.

 

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#J.PMorgan : ” Jamie Dimon Reprieve and Given `$1.5 Million’ and `Treated ‘ with `Additional’ $18.5 Million in Restrictive Stock”

#AceFinanceNews says `JPMorgan’ gives `CEO Jamie Dimon‘ a raise despite shelling out $20 bln in fines

Published time: January 24, 2014 21:02 

Edited time: January 25, 2014 02:21
Jamie Dimon (Reuters / Larry Downing)Jamie Dimon (Reuters / Larry Downing)
  It was only a year ago that JPMorgan CEO Jamie Dimon was getting his pay docked by millions of dollars. Now, though, the company is giving their chief executive a raise.

Despite the fact that JPMorgan was hit with $20 billion worth of fines during 2013, Dimon will receive $1.5 million for the year. That base salary is virtually unchanged from the year before, but the company will also pay him an additional $18.5 million in restricted stock, according to a public filing with the Securities and Exchange Commission.

According to CNBC, some board members were divided over the possibility of raising Dimon’s compensation levels. Those opposed cited the record levels of fines the company was ordered to pay out as a reason to keep his salary where it was, while others believed Dimon deserved a raise due to the difficult landscape he was operating in.

Just last year, Dimon had his pay slashed from $23 million to $11.5 million following revelations in the ‘London Whale’ scandal that showed the company’s traders manipulated bank records in order to cover up $6.2 billion in losses. As a result, JPMorgan agreed to pay nearly $1 billion in fines to settle the case against it.

Over the course of 2013, JPMorgan also settled cases involving its role in selling bad loans that precipitated the 2008 financial crisis, including a $13 billion agreement with the Department of Justice announced in November.

As RT noted last year, this fine was more than triple the $4 billion payout that BP oil company paid for its role in the Gulf Coast oil spill. JPMorgan was tagged for overhauling the quality of the mortgage bonds it sold to investors such as Fannie Mae and Freddie Mac between 2005 and 2007.

The terms of the settlement dictate that the bank will pay more than $6 billion to reimburse investors, put $4 billion towards a mortgage relief program for affected homeowners, and $2 billion to settle civil cases unfolding in five states.

In spite of all these penalties – the company was also included in the group of banks fined 1.7 billion euros for manipulating lending rates – JPMorgan’s stock price has risen about 22 percent over the last year. Following a quarterly loss for the first time in 10 years during the third quarter of 2013, the company recently reported a profit of $5.28 billion in the fourth quarter.

 

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Elizabeth Warren: “What She Had to Say About JP Morgan’s CEO Jamie Dimon”

#AceFinanceNews says on Saturday night at 9:00 PM/EST Bloomberg aired an extra special episode of “Political Capital with Al Hunt,” his guest is none other than Senator Elizabeth Warren (D-MA), and she had some fairly blunt things to say about JP Morgan‘s CEO, Jamie Dimon.

English: Wall Street sign on Wall Street

English: Wall Street sign on Wall Street (Photo credit: Wikipedia)

Warren was elected on crusading against Wall Street malfeasance, and JP Morgan is Wall Street’s bad boy right now. The bank has paid $20 billion in legal fees to the government over the last year —that’s enough to pay the New York Yankees for 2o years — and just this week paid out $1.7 billion for failing to alert authorities of  their former client, Bernie Madoff‘s infamous decades long Ponzi scheme.

What’s more, knowing that Madoff was a fraud, JPM got rid of their $275 million exposure to Madoff shortly before he was arrested in December 2008.

When asked whether Jamie Dimon should be replaced as a result of these issues, Warren said: “Look, the real question is, do you have somebody who has shown they understand there were problems in the past and that they have a different plan going forward? What JPMorgan Chase and the other large financial institutions have done is they have continued to get bigger and bigger and load up more and more on risk…I’m waiting for him to demonstrate that understanding… And he’s had a long, long time.”

One thing Dimon can understand, however, is the health of his bank. JPM’s shares are up 28 percent over the last 12 months, and analysts expect the bank to have pulled in $23.4 billion in revenues when it reports Q4 earnings next week — a small improvement from Q3, and more than any other big bank.

Official portrait of United States Senator (R-OK).

Official portrait of United States Senator (R-OK). (Photo credit: Wikipedia)

So JPM can handle the lawsuits in stride, but Warren cannot. Just this week, after JP Morgan’s settlement, she teamed up with Senator Tom Coburn (R-OK) to introduce a new bill called the Truth In Settlements Act.

Basically, it would require the Justice Department and other agencies handling settlements against corporations to be transparent about their negotiations, and make agreements easy to find online (you can watch a video of her speech on the floor of the house below).

Under this new law, regulators and law enforcement agencies would still be able to use confidential settlements, but companies would have to disclose how often they are used and why.

Now, since the Justice Department has said that it’s going to continue going after not just JP Morgan, but also other Wall Street banks for issues dating back to the financial crisis, it’s easy to see where Warren’s coming from with this bill. The New York Times reported this week that Wall Street banks could pay up to $50 billion to “buy peace” with the government.

“When you dig below the surface, settlements that seem tough and fair can look like sweetheart deals,” said Warren. “If we expect government agencies to hold companies accountable for breaking the law. Then we the public must be able to keep agencies accountable for enforcing the law. We can’t do that if we’re kept in the dark.”

 

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Who will Receive What, When JP Morgan’s Fine of $13 Billion is Finally Settled

Dismissed U.S. attorneys summary

Dismissed U.S. attorneys summary (Photo credit: Wikipedia)

 

Because the deal was still in the works, the details of JP Morgan‘s record $13 billion fine to settle civil violations related to mortgage-backed securities it sold before the housing crisis have been murky.

 

But now the WSJ has the break down.

 

For the record, the Justice Department has decided not to make JP Morgan pay punitive damages for mortgages sold by Bear Stearns and Washington Mutual, since JPM essentially helped the government out by buying the banks as they were collapsing.

 

So that’s nice, but the figure will still stay at $13 billion.

 

Now for the numbers:

 

  • $4 billion will go to Fannie Mae and Freddie Mac
  • $4 billion will go to underwater homeowners
  • $3 billion will go to institutional investors that lost money on bad mortgage-backed securities
  • and $2 billion will serve as a penalty for JPM’s conduct in the lead up to the financial crisis

 

According to the WSJ, all the drama surrounding this deal started on September 24th, the day the DOJ set a deadline to file a civil suit against the bank over MBS. The day before, JPM called and offered $3 billion, which the DOJ refused.

 

The JPM called back and said they’d negotiate a higher figure if they didn’t have to go to Court.

 

That brings us to now. After the government shut down ended, lawyers at the DOJ told JP Morgan they had six days to cobble an agreement together. What that means is that we could have a finalized agreement by this week.

 

For the full story, head to the WSJ>

 

 

 

#acedebtnews, #aceworldnews, #bear-stearns, #federal-takeover-of-fannie-mae-and-freddie-mac, #j-p-morgan, #jp-morgan, #jpm, #jpmorgan-chase, #mortgage-backed-securities, #united-states-department-of-justice, #washington-mutual

One little known secret of the global economic…

One little known secret of the global economic collapse of 2008 is that the same six individuals who caused it, just happened to be the same six individuals who were arrested and convicted for the same crime 20 years earlier. Surprised? They were the brains behind the financial firm of Charles H. Keating, best known for controlling five US Senators notoriously known as the Keating 5. After the scandal, those six evil geniuses went to banks like Goldman Sachs, JP Morgan and Citigroup, where they invented the financial instruments that destroyed the world in 2008. And just as the banks simply recommitted a brilliant crime invented by someone else, today they’re doing the exact same thing.
http://www.whiteoutpress.com/articles/q32013/goldman-sachs-and-jp-morgan-repeating-enron-crimes/

#acefinancenews, #economic-collapse-2008, #citigroup, #enron, #goldman-sachs, #jpmorgan-chase, #keating, #us-senators

One Man’s Escape From Debt-Collection Hell (Excerpt)

I do not claim credit for every post being my own nor should l, so firstly l would like to say thanks to Huffpost Money and Michael Casey.

My personal views are this is how debt can seize you in its grip and it holds onto you like a alligator in its teeth. To break its grip firstly do not need to be scared of debt,its only money. Also secondly do not let people scare you who you owe debt! Once you master these first two, you can look at the problem squarely in the eye and tackle it head on.

Need help or guidance with debt management leave a comment l check all of them and vet each one and will send you a personal email, in reply. Lastly you do not always and in more cases than you realise, do you have to borrow more to get out of debt. You just need help and guidance too make an arrangement with your creditors!

This is one mans story called Joe an ordinary man like any other who just wanted to do right by his family. But he wanted to use his skills to improve his life by borrowing and this is the result!

HIS STORY-  Or as l prefer to call it hisstory repeating its self!

For Joe Bonadio, the years surrounding the U.S. financial crisis might best be described as the era of telephone battles.

For most of the 53-year-old professional drummer’s adult life, his home phone was a useful appliance. It was the conduit through which he would be informed of his next gig or advertising jingle contract. “Most of the time, it always seemed like the work just came on its own, through recommendations and people wanting to use me,” Bonadio said. “It came from the telephone and it seemed like the phone always provided.”

But all that came to an abrupt halt in late September 2008, two weeks after the collapse of Lehman Brothers, after he returned to New York from a recording job in Los Angeles.

“I came home and there were no calls. The phone had just stopped,” Bonadio said.

The lull extended into weeks and then months. In the meantime, Bonadio, assuming that the work would come back, continued with the lifestyle he’d been accustomed to, funding it with credit card debt.

Then, just over a year later, the phone started ringing again, relentlessly.

The callers were not musicians or advertising executives. They were debt collectors, and with a mix of recorded and personal messages they were urging him in increasingly strident tones to make a minimum payment on one of his three overdue credit cards. He had racked up a total of $50,000 in debts and there was no way of repaying them.

Advised by a debt counseling firm, Consumer Recovery Network, Bonadio had decided that his only escape was to seek a settlement with his creditors. Not only was his credit card debt expanding exponentially due to late fees and compound interest, but the exotic, interest-only mortgage that a Merrill Lynch advisor had talked him into three years earlier was ballooning out of control. Meanwhile, the real estate collapse had halved the value of his home. In deciding to go through what proved to be an exhausting settlement process, he was given a window into the ruthless debt-collecting methods of the same financial institutions whose reckless and often predatory lending practices had fueled the financial crisis that stripped him of his livelihood. And it all played out via the telephone.

As Bonadio quickly learned, a customer who falls behind on a credit card payment soon gets a phone call. At first it is a friendly reminder that the account is overdue. If that doesn’t prompt a payment, there will soon be more calls, occurring more frequently. Bonadio says that at one point he was receiving between forty and fifty calls a day from his three banks. Typically the calls are recorded messages, but if the recipient responds, a human being jumps on the line to suggest that the minimum payment be made. If the customer says he or she won’t or can’t make the payment, the bank representative will warn about a deteriorated credit rating and the perils of bankruptcy. At that moment, many debtors relent. In so doing they hand the bank a victory at their expense.

Here’s why the banks win: Based on the universally applied 29.9% default rate that Bonadio was paying on his total. By then he would have paid an additional $130,000 in interest.

In contrast, because of the front-loading effect of the interest paid when the loan was at its largest, the banks would have earned back the entire amount in just three and half years. What the bank desperately wants to avoid is Here’s why the banks win: Based on the universally applied 29.9% default rate that Bonadio was paying on his a six-month cut-off date. If payments aren’t received by then, it must write off the entire loan on its balance sheet, recognize the loss, and then fight with other unsecured creditors over what could be a measly payout from a drawn-out bankruptcy. That’s why it resorts to the telephone equivalent of saturation bombing during the first ninety days.

“They know what’s going to drive you nuts and that you are going to give them $60 just to shut the phone up,” said Bonadio. If just one of those calls hits its target and prompts a minimum payment, the clock kicks back to six months and the bank is in the clear. But if the customer reaches the fourth month with no payment, the game changes. Out of the blue, a settlement letter will arrive from the bank, offering to accept perhaps 50 or 60 cents on the dollar. The savvy debtor will politely demand something more generous. And the bank, weighing the cost of a lower settlement against that of a charge-off, will routinely concede. In Bonadio’s case, he settled with Citibank, JPMorgan Chase, and Bank of America for an average 31 percent of the total, a saving of $37,379. And while his course of action initially trashed his credit rating, the subsequent improvement in his overall finances later prompted it to rise.

Most debtors aren’t like Bonadio, though. Most cave in to the banks’ phone calls and make their overdue payments. Indeed, according to the moral code by which most of us live by, that should be the right thing to do.

But the financial crisis makes the ethics less clear cut.

Just like Joe Bonadio, it left millions trapped by ballooning mortgages sold to them by the same creditors who were demanding these payments. Banks had used complex, confusing and poorly explained financial products to exploit vulnerable people. This, along with the fact that the crisis that left so many of them out of work was clearly generated by the same banks’ zealous risk-taking, raises questions about the fairness of the interest penalties on their credit cards.

But even beyond the morality issue, there was a simple point of pragmatism. With so many Americans at that time buried in debt, to force them to perpetuate loans they could never repay was to prolong the chance of a recovery in the U.S. economy. And that meant that the banks themselves were unable to get back on their feet and revive a healthy, constructive business of credit creation.

Bonadio is one of the few who outwitted the system. Why? Not because of his steely resolve, but thanks to a device that the Consumer Recovery Network advised him to purchase: a caller ID machine with ring controller. With that little box, he could program the phone not to ring whenever calls came from a number associated with one of the banks’ debt collectors. The machine, he says, kept him sane. It also gave him the detachment and time to watch how the banks approached problems such as his.

The machine’s call log captured the entire combative process through which the banks fight to get an insolvent debtor to make a payment until it can’t afford to play that cynical game any longer. That perspective embittered Bonadio.

“I’m not a religious person,” he said, “but it is as if Satan said, ‘I want to be on earth,’ and God asked him, ‘What are you going to be?’ And he said, ‘I’m going to be a bank. ”

From the global financial crisis to the Flash Crash, it’s not hard to find reasons why people are increasingly disgusted with Wall Street and the world of finance generally. It’s also not hard to sympathize. Michael J. Casey, an editor and columnist for Dow Jones Newswires, has a new book, The Unfair Trade: How Our Broken Global Financial System Destroys The Middle Class, that is a guided tour of the many ways the global financial system is letting us all down. You might call it a Dante’s Inferno of Wall Street. But there’s hope in the book, too, hope that we’re not all doomed to an existence of being perpetually abused by global financiers. This excerpt shows how one man won a small victory against the system. — Mark Gongloff

(Adapted from The Unfair Trade: How Our Broken Financial System Destroys the Middle Class. Copyright © 2012 by Michael Casey. Published by Crown Business, a division of Random House, Inc.)

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Wipe our Debt

Wipe our Debt (Photo credit: Images_of_Money)



  • English: CBO Long-Term Public Debt Scenarios

    English: CBO Long-Term Public Debt Scenarios (Photo credit: Wikipedia)

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