JPMorgan Chase disclosed $1.3 billion of expenses linked to faulty mortgages and foreclosures in the third quarter of 2011, bringing the bill for the five biggest home lenders since 2007 close to $69 billion, Bloomberg News reported.
The bank had designated $314 million for buying back defective and faulty loans, but also incurred $1 billion in litigation costs related to the loans and foreclosures, according to its quarterly report.
“This is still far from over,” said Neil Barofsky, former inspector general for the U.S. Troubled Asset Relief Program. “These numbers are very high to begin with, but this is now an enormous overhang on the industry, and it’s well deserved. Sooner or later the banks will pay the price for their behavior.”
Bank of America’s mortgage and foreclosure costs came in at around $1.18 billion in the third quarter, including a $278 million provision for repurchases, $500 million for litigation costs and $400 million for waivers and assessments related to foreclosure problems, Bloomberg said. [Bloomberg]