Surprise, surprise the big banks that everyone loves were caught after selling BAD residential mortgage backed securities to investors before the financial crisis.
Does anyone really believe that they didn't know?
Courtesy of NMP:
Joseph A. Smith Jr. has released his fourth report on JP Morgan Chase’s progress under its settlement with the federal government and five states concerning claims that Chase, Bear Stearns and Washington Mutual packaged and sold bad residential mortgage-backed securities (RMBS) to investors before the financial crisis (Chase RMBS Settlement). In the report, Smith confirmed that Chase provided $2,245,673,500 in consumer relief credit to 111,924 borrowers through Sept. 30, 2014. Chase must provide $4 billion in credited relief by Dec. 31, 2017.
The report also contains Chase’s self-reported gross consumer relief. The Monitor has not yet validated the crediting of these activities. According to Chase, in the fourth quarter 2014, Chase provided $5.1 billion in principal forgiveness and forbearance, rate reduction, and low-to-moderate or disaster area lending to 39,512 borrowers. Chase also asserted that as of December 31, 2014, 151,436 borrowers had received some type of relief, including $1,956,638,212 in principal forgiveness or forbearance, $1,115,656,744 in rate reduction, and $15,771,381,912 in eligible lending.
“After in-depth formula testing and data review, I have credited Chase with more than half of the $4 billion in consumer relief credit it must provide under this agreement.” Smith said. “I look forward to reporting on my next round of testing mid-year. In addition to its consumer relief requirements, I have no reason to believe that Chase has failed to comply with any of the policy-based, non-creditable requirements of the Settlement.”
So, to recap:
The big banks make huge profits by selling the bad debt.
The big banks hurt consumers (investors) that bought the bad debt.
The big banks blame the "industry" and mortgage brokers for causing the financial crisis with the help of main stream media and politicians.
The big banks help push legislature through that forces heavy regulations on mortgage brokers that want to continue in the business.
Finally, big banks are slapped on the wrist and forced to "repay" consumers by providing relief credit in the form of being human and working with people in distress to find a way to keep their homes.
Sounds fair? Until next time...JJ