Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Bank of America    BAC

News SummaryMost relevantAll newsSector newsTweets

JPMorgan to pay $614 million in U.S. mortgage fraud case

share with twitter share with LinkedIn share with facebook
share via e-mail
02/05/2014 | 03:10am CET
JP Morgan Chase & Co sign outside headquarters in New York

JPMorgan Chase & Co (>> JPMorgan Chase & Co.) settled the latest in a string of legal claims on Tuesday when it agreed to pay $614 million to the U.S. government and admitted that it defrauded federal agencies by underwriting sub-standard mortgage loans.

JPMorgan Chase & Co (>> JPMorgan Chase & Co.) settled the latest in a string of legal claims on Tuesday when it agreed to pay $614 million to the U.S. government and admitted that it defrauded federal agencies by underwriting sub-standard mortgage loans.

JPMorgan, the largest U.S. bank by assets, said as part of the settlement that for more than a decade it approved thousands of insured loans that were not eligible for insurance by the Federal Housing Administration or the Department of Veterans Affairs, according to court papers.

As a consequence, "both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses," the U.S. Justice Department said in a statement.

JPMorgan is one of several banks that has faced similar allegations. Citigroup Inc (>> Citigroup Inc) and Deutsche Bank AG (>> Deutsche Bank AG) have also reached settlements, while the Justice Department is seeking $2.1 billion in penalties from Bank of America Corp (>> Bank of America Corp) after a jury found the bank liable for fraud over mortgages sold by its Countrywide unit.

Last year, JPMorgan agreed to about $20 billion in settlements in its drive to clear up legal claims. The deals covered claims over other mortgage issues, as well as derivatives and power trading.

The latest settlement was filed in U.S. District Court for the Southern District of New York and was approved by Judge J. Paul Oetken, according to a statement from the U.S. Attorney's Office in Manhattan.

The bank said in a statement that the "settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it."

It added that it has already recorded reserves for the settlement and does not expect the deal to have any significant additional financial impact.

The settlement with the Justice Department began with a whistleblower, Keith Edwards, who sued JPMorgan in January 2013 under an anti-fraud law known as the False Claims Act. The law allows individuals to sue government contractors and suppliers for defrauding taxpayers. Whisteblowers can keep a slice of the penalty if successful.

It has not been determined what Edwards' share will be, according to court papers. The existence of his suit was sealed until Tuesday.

The office of Preet Bharara, the U.S. attorney in Manhattan whose staff worked with Edwards on the suit, said the case was one of eight civil fraud suits that it had brought since May 2011 alleging fraudulent lending practices by residential mortgage lenders.

In February 2012, Citigroup agreed to pay $158.3 million and Flagstar Bancorp Inc (>> Flagstar Bancorp Inc) agreed to pay $132.8 million. In May 2012, Deutsche Bank settled for $202.3 million.

In other recent legal claims, JPMorgan on Monday agreed to pay $1.45 million to settle four-year-old allegations brought by the U.S. Equal Employment Opportunity Commission that the bank had maintained a sexually hostile environment for women in a mortgage loan center on Ohio.

On Tuesday a federal bankruptcy judge approved the bank's $543 million deal to end two private lawsuits stemming from its relationship with convicted Ponzi scheme mastermind Bernard Madoff. Last month, the bank separately agreed to pay more than $2 billion to settle criminal charges related to the Madoff fraud.

(Additional reporting by Nate Raymond; Editing by Bernard Orr and Edwina Gibbs)

By David Ingram and David Henry

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on BANK OF AMERICA
11/18 BANK OF AMERICA : Mercury News Sal Pizarro column
11/18 Sale of Capital Bank near completion Sale of Capital Bank near completion
11/18 EXCLUSIVE : Bank of America said to delay marijuana ID cards
11/17 BANK OF AMERICA : refusal to process online payments slows marijuana ID cards
11/17 BANK OF AMERICA : Mothers' Milk Bank of North Texas Continues Growth Trajectory ..
11/17 BANK OF AMERICA : Pahrump area entertainment guide
11/17 SNEED EXCLUSIVE : Priest protests bank’s ‘discriminatory’ doub..
11/17DJBond Investors' Suit Claims Dealers Colluded on Treasurys Prices
11/16DJBANK OF AMERICA : Merrill Lynch's 2018 Pay Plan Spurs Some Dissent in Broker Ran..
11/16 BANK OF AMERICA : Albuquerque Man Sentenced to Prison for Federal Bank Robbery C..
More news
News from SeekingAlpha
11/18 Tracking John Paulson's Paulson & Company Portfolio - Q3 2017 Update
11/17 PAYPAL : The Growth Is Not Finished
11/17 BANKS IN 2018 : Winners For A Growing Economy
11/16 Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio - Q3 2017 Update
11/15 Bank staffing moves under Brexit becoming clearer
Financials ($)
Sales 2017 89 388 M
EBIT 2017 33 345 M
Net income 2017 19 492 M
Debt 2017 -
Yield 2017 1,47%
P/E ratio 2017 14,60
P/E ratio 2018 12,23
Capi. / Sales 2017 3,11x
Capi. / Sales 2018 3,00x
Capitalization 278 B
Duration : Period :
Bank of America Technical Analysis Chart | BAC | US0605051046 | 4-Traders
Technical analysis trends BANK OF AMERICA
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 31
Average target price 28,0 $
Spread / Average Target 5,1%
EPS Revisions
Brian T. Moynihan Chairman, President & Chief Executive Officer
Catherine P. Bessant Co-COO & Chief Technology Officer
Thomas Kell Montag Co-Chief Operating Officer
Paul M. Donofrio Chief Financial Officer
Thomas J. May Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
BANK OF AMERICA20.45%277 663
WELLS FARGO-1.74%266 844
BANK OF CHINA LTD12.50%207 269