Big Banks are Looking for Deal with Obama
Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Company (NYSE:WFC) are just a few of the top name banks looking for a deal on the foreclosure debacle that began with the housing crisis.
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The banks came under scrutiny of abuses when evidence surfaced in 2010 that banks foreclosed on borrowers with only a cursory examination of the relevant documents and now they are looking to close a settlement deal with the government. One of the remaining holdouts for the deal is the state of California which if they sign onto the deal, banks would be fattening the pot from $19B to $25B for nationwide mortgage relief.
NY Times reports that with a deadline looming on Monday for state officials to sign onto a landmark multibillion-dollar settlement to address foreclosure abuses, the Obama administration is close to winning support from a crucial state that would significantly expand the breadth of the deal.
The biggest remaining holdout, California, has returned to the negotiating table after a four-month absence, a change of heart that could increase the pot for mortgage relief nationwide to $25 billion from $19 billion.
Another important potential backer, Attorney General Eric T. Schneiderman of New York, has also signaled that he sees progress on provisions that prevented him from supporting it in the past.
The potential support from California and New York comes in exchange for tightening provisions of the settlement to preserve the right to investigate past misdeeds by banks, and stepping up oversight to ensure that the financial institutions live up to the deal and distribute the money to the hardest-hit homeowners.
The settlement would require banks to provide billions of dollars in aid to homeowners who have lost their homes to foreclosure or who are still at risk, after years of failed attempts by the White House and other government officials to alter the behavior of the biggest banks.
The banks — led by the five biggest mortgage servicers, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — want to settle an investigation into abuses set off in 2010 by evidence that they foreclosed on borrowers with only a cursory examination of the relevant documents, a practice known as robo-signing. Four million families have lost their homes to foreclosure since the beginning of 2007.
BAC shares are currently trading at $7.94, up 1.28% and $0.1 with today's volume currently at 191.06M shares traded.
JPM shares are currently trading at $38.12, down -0.42% and $-0.16 with today's volume currently at 18.68M shares traded.
WFC shares are currently trading at $30.17, down -1.5% and $-0.46 with today's volume currently at 15.65M shares traded.