Banks that agreed to help troubled borrowers as part of a settlement with regulators over foreclosure misdeeds are spending most of the promised aid on sales that displace homeowners and forgiveness that erases home equity loans from their books.
The cost of protecting bank bonds from default has fallen to the lowest level in as much as 20 months, pushed down at the same time regulators are loosening reserve rules and measures aimed at staving off another credit seizure.
JPMorgan Chase & Co., the largest U.S. bank by assets, said fourth-quarter profit rose 53 percent, beating analysts’ estimates as mortgage revenue more than doubled and the lender set aside less for future losses.
U.S. regulators led by the Office of the Comptroller of the Currency will replace a largely fruitless effort to find victims of botched foreclosures at the 14 biggest mortgage servicers with flat penalties, five people briefed on the talks said.
U.S. banks that have been earning record profits from home loans are adding or transferring thousands of staff to catch up with demand for refinancing after shortages blocked homeowners from getting lower rates.
The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else.