Dimon Vows Fight Moynihan Lost Over Claims From Mortgages - News and Current Events | futures io social day trading
futures io futures trading

Dimon Vows Fight Moynihan Lost Over Claims From Mortgages
Updated: Views / Replies:296 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Thread Tools Search this Thread

Dimon Vows Fight Moynihan Lost Over Claims From Mortgages

  #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,884 since Nov 2010
Thanks: 3,303 given, 3,334 received

Dimon Vows Fight Moynihan Lost Over Claims From Mortgages

Jamie Dimon, who's already spent $18.5 billion cleaning up mortgages at JPMorgan Chase & Co. (JPM), is warning a growing list of claimants that they're in for a fight.

Investors demanding that the biggest U.S. lender buy back soured loans or compensate them for losses on mortgage securities "face a long and difficult road," Dimon said last week in a shareholder letter. Those lining up include holders of $95 billion of bonds represented by Gibbs & Bruns LLP, the law firm that won $8.5 billion last year from Bank of America Corp. (BAC)

"We are going to fight repurchase claims that pretend the steep decline in home prices and unprecedented market conditions had no impact on loan performance," Dimon, chief executive officer of the New York-based lender, wrote in the April 4 letter. He'll also oppose "securities claims brought by sophisticated investors who understood and accepted the risks."

Dimon, who updates investors on his firm's mortgage losses tomorrow, is seeking to contain expenses from faulty loans that have cost the industry more than $72 billion. Similar combative language didn't work for Bank of America CEO Brian T. Moynihan, who said in 2010 the firm will engage in "hand-to-hand combat" to fend off demands before agreeing to a string of settlements.

"They were in the same businesses as everyone else," Mark Williams, a former Federal Reserve bank examiner who teaches finance at Boston University, said of JPMorgan. "If everyone around them is basically settling, it's hard for me to think that there's not something there that will make them settle."

Repurchase Costs JPMorgan had a $3.6 billion liability for repurchases at the end of last year, the firm said in January. Losses of as much as $2 billion beyond that are "reasonably possible," and the firm expects repurchase costs of $350 million per quarter, according to a January presentation. Lenders can be forced to repurchase a loan, called a putback, if data backing it including borrower income or home values proves incorrect.

The bank has braced investors for the possibility of greater losses, saying that legal costs could exceed reserves by as much as $5.1 billion. Amy Bonitatibus, a spokeswoman for JPMorgan, declined to comment beyond Dimon's remarks. Rick Simon of Bank of America also declined to comment.

Dimon, 56, acknowledged in the letter that the firm made "too many mistakes" in mortgages, including by originating loans with poorer underwriting standards and being unprepared for a surge in foreclosures. The industry's $25 billion settlement in February ends claims tied to servicing, he said.

‘Top Lawyers' The firm has hired "top lawyers" to help defend itself against rising claims, Dimon said in December. The company was a target in suits tied to $54 billion in private label securities at the time, which involve firms other than U.S.-owned Fannie Mae and Freddie Mac, a figure Dimon said would rise.

"Jamie probably doesn't want to provide incentive for mortgage investors to come after the bank for more money," said Pri de Silva, a senior analyst at New York-based CreditSights Inc. "There's also an advantage in paying tomorrow as opposed to today regarding when they have to take the reserve."

JPMorgan may be in a better position than Bank of America was to resist settlement demands. Dimon's bank earned a record $19 billion in profit in 2011, compared with $1.4 billion at Charlotte, North Carolina-based Bank of America. Plagued by concern that mortgage losses would force it to raise capital, Bank of America's shares sunk 58 percent last year, compared with the 22 percent decline of JPMorgan.

Limit Payouts Moynihan even briefly weighed limiting payouts with a bankruptcy filing for Countrywide Financial Corp., the unit acquired in 2008 and the firm's biggest source of losses. Most of JPMorgan's loan problems were inherited from the Bear Stearns & Co. and Washington Mutual Inc. takeovers, Dimon has said.

In December, Houston-based Gibbs & Bruns said it had asked trustees of $95 billion in bonds to investigate whether JPMorgan included ineligible loans in the securities. Kathy Patrick, a Gibbs & Bruns partner, didn't return messages seeking comment.
Other firms that bought or insured mortgage securities have since filed lawsuits against the lender.

Asset Management Fund, based in Chicago, sued in February over claims the bank gave faulty information involving $515.6 million in bonds. In March, DZ Bank AG, Germany's largest cooperative lender, claimed it had about $400 million in damages over similar allegations.

That month, Ambac Assurance Corp. sued JPMorgan, accusing the company's EMC Mortgage and Bear Stearns units of fraud and breach of contract over the sale of mortgage securities. The bond insurer said that it had to pay more than $200 million in claims because of the failed investments.

BofA Buybacks Ebbing Dimon's comments come as some analysts say that Moynihan's woes from mortgage buybacks may be ebbing.

Recent favorable court decisions increase the likelihood of approval of the lender's $8.5 billion settlement, CreditSights analysts de Silva and David Hendler wrote last week in a note. That would resolve about 60 percent of private label loans created by Countrywide from 2004 to 2008.

Remaining costs should be manageable, the analysts wrote in the April 3 note. The biggest expense left is about $8 billion a year from servicing troubled mortgages, according to CreditSights. Bank of America had a $15.9 billion liability for repurchase claims as of Dec. 31 and legal losses could reach $3.6 billion beyond reserves, the firm said. Bank of America shares have surged more than 50 percent this year amid signs the U.S. economic recovery is strengthening.

Waging ‘Combat' Moynihan, 52, has spent his first two years as CEO atoning for his predecessor's purchase of Countrywide, once the biggest mortgage company and one that was blamed by lawmakers for irresponsible lending that fueled the crisis.

Less than two months after saying in November 2010 that the bank is waging "hand-to-hand combat" over repurchase demands, Moynihan agreed to a $3 billion deal settling some claims with government-owned firms Fannie Mae and Freddie Mac. That accord was followed in April 2011 by one valued at $1.6 billion with bond insurer Assured Guaranty Ltd. (AGO)

In June 2011, Moynihan agreed to the $8.5 billion deal resolving claims from investors including BlackRock Inc. (BLK) and Pacific Investment Management Co. If approved by a court, the pact resolves claims tied to $424 billion of bonds. That month, the firm also set aside $5.5 billion for other demands.

The CEO said at the time that settling with investors was preferable because it avoids the "possible outcome being much more adverse to the company if we kept fighting."

Moynihan's truce with mortgage buyers didn't last. Fannie Mae, seeking to limit the cost of its U.S. taxpayer bailout, stepped up demands last year, saying that the lender must repurchase loans if an insurer drops coverage. Bank of America refused, and in January Fannie cut the company off as a partner for the funding of new loans.

Dimon Vows Fight Moynihan Lost Over Claims From Mortgages - Yahoo! Finance

Reply With Quote


futures io > > > > Dimon Vows Fight Moynihan Lost Over Claims From Mortgages

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

Wyckoff Hunting for Great Risk/Reward Ratio w/Gary Fullett

Elite only

Digging into the Details of iSystems w/Stage 5 & iSystems

Jun 5

Similar Threads
Thread Thread Starter Forum Replies Last Post
At BofA, Moynihan Grapples With Past kbit News and Current Events 0 January 24th, 2012 02:01 PM
Merkel Vows Faster Eurozone Reforms After Downgrades Quick Summary News and Current Events 0 January 14th, 2012 04:30 PM
BofA Chief Moynihan Faces Tough Task at Investor Day Quick Summary News and Current Events 0 March 4th, 2011 07:20 PM
Mubarak Vows to Stay On Until Elections, Cedes Some Power Quick Summary News and Current Events 0 February 10th, 2011 07:00 PM
Now in Power, G.O.P. Vows Cuts in State Budgets Quick Summary News and Current Events 0 November 8th, 2010 09:40 AM

All times are GMT -4. The time now is 07:40 PM.

Copyright © 2018 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2018-05-24 in 0.09 seconds with 19 queries on phoenix via your IP