SNL Financial:JP Morgan,BofA,Wells Fargo Tops In Foreclosed Home Loans
October 12 2010 - 3:58PM
Dow Jones News
The banks with the largest dollar amounts of foreclosed home
loans on their books are J.P. Morgan Chase (JPM), Bank of America
(BAC) and Wells Fargo & Co. (WFC), according to analyst firm
SNL Financial.
Several large banks, including J.P. Morgan and Bank of America,
have instituted widespread foreclosure halts due to worries about
documentation problems. The halts come at a time when many of the
biggest lenders are struggling to work through the non-performing
assets still weighing on their books.
J.P. Morgan has $19.5 billion, or 7.5% of its 1- to 4-family
mortgage loans, in foreclosure, according to data from SNL. Bank of
America has $18.7 billion, or 4.39%, and Wells Fargo has $17.5
billion, or 4.74%.
The three big mortgage lenders have billions more in servicing
rights on loans in foreclosure. Bank of America has $88 billion of
loans it services for other lenders where the properties are in
foreclosure; J. P. Morgan has $54.5 billion and Wells Fargo has
$36.4 billion. The data are as of June 30.
State regulators and federal lawmakers are demanding banks halt
foreclosures while they probe allegations of abusive practices by
lenders and loan servicers, including improper reviews of
borrowers' files and problems with documentation. The Wall Street
Journal reported that as many as 40 state attorneys general are set
to announce an investigation into the mortgage servicing industry
on Wednesday.
Bank of America has already agreed to stop the process in 50
states. J.P. Morgan stopped foreclosures in 23 states and will
expand it to a few other states. Wells Fargo and USBancorp (USB)
said last week they would not stop foreclosures. Ally Financial has
suspended evictions and foreclosure sales in 23 states. Goldman
Sachs Group Inc. (GS), which doesn't appear in SNL's data, has
suspended foreclosures through its Litton Loan Servicing unit in an
undisclosed number of states until it completes a review of its
documents.
A J.P. Morgan spokesman said, "We have requested that the courts
not enter judgements in pending matters until we complete our
review" of foreclosure documents. An Ally spokeswoman confirmed the
suspensions. A Litton Loan spokeswoman would not provide more
details. Spokesmen for Bank of America and Wells Fargo did not have
an immediate comment.
A spokesman for USBancorp, in an email, said, "We do not have
plans to halt foreclosures."
SNL ranked Barclays (BCS, BARC.LN), New York Private Bank &
Trust Corp. and Ally as the lenders with the highest percentage of
their 1- to 4-family home loans in foreclosure. According to its
data, Barclays has $495 million, or 17.7% of its 1- to 4-family
loans in foreclosure proceedings, New York Private Bank has $378
million, or 12.05%, and Ally has $2.1 billion, or 10.16%.
Barclays says it sold its HomeEq mortgage servicing operation to
Ocwen Financial Corp. (OCN) last month, making Ocwen the third
largest U.S. subprime servicer.
A spokesman for New York Private Bank, which is controlled by
real estate investor Howard Milstein and family, said the company
expects losses on its portfolio to be minimal, and added, "we do
not service any securitized debt, but only mortgages which we
originated for our own portfolio."
Others in the top ten with the largest percentage of foreclosed
loans are HSBC North America, with 9% of its 1- to 4-family loans
in foreclosure, and MetLife Inc. (MET), with 6.44%. Several of the
top ten were focused on Puerto Rico, where the economy began
slipping before it did in the U.S.: Doral GP Ltd. (DRL) has 8.58%
of its 1- to 4-family loans in foreclosure; First BanCorp Puerto
Rico (FBP) has 7.06%; Oriental Financial Group (OFG) has 6.42%, and
Banco Bilbao Vizcaya Argentaria S.A.'s (BBVA) Puerto Rico operation
has 6.21%. JP Morgan is also in the top ten with the largest
percentage of foreclosed loans.
-By Liz Moyer, Dow Jones Newswires; 212-416-2512;
liz.moyer@dowjones.com
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