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JPMorgan Chase, Wells Fargo, and Bank of America Lose $5,000,000,000 as Credit Card Delinquencies Surge

Posted on October 16, 2024by Admin

US banks are unloading billions of dollars in bad debt that they have given up on collecting, according to new numbers from the Federal Deposit Insurance Corporation (FDIC).

In its new Quarterly Banking Profile report, the FDIC says US banks reported $21.3 billion in net charge-offs in the second quarter of the year, due largely to credit card delinquencies and commercial real estate loans going bad.

This is the highest quarterly net charge-off rate since the second quarter of 2013 and 20 basis points higher than the same period last year. The main culprit: consumers struggling with higher interest rates and inflation.

The new numbers come as JPMorgan Chase, Wells Fargo and Bank of America individually disclose billions of dollars in collective net charge-offs in Q2.

JPMorgan Chase reports its net charge-offs reached $2.2 billion in Q2, up from $1.4 billion in Q2 of last year.
Wells Fargo reports its net charge-offs surged to $1.3 billion last quarter, up from $764 million one year ago.
Bank of America reports its net charge-offs hit $1.5 billion, up from $900 million year-over-year.

The FDIC says the total charge-off rate for US banks is now higher than the pre-pandemic average.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Banks Prepare for Consumers to Stop Paying Off Their Credit Cards

Posted on July 26, 2024by Admin

Big banks, like JPMorgan Chase, Bank of America, Wells Fargo and Citigroup are preparing to face more risk when it comes to their lending practices. With interest rates sitting at a two-decade high and inflation rates rising, these banks have raised their provisions for credit losses from the previous quarter.

These provisions are the money that financial institutions set aside to cover any potential losses from credit risk, including delinquent or bad debt and lending, like commercial real estate (CRE) loans.

JPMorgan built up $3.05 billion in provision for credit losses in the second quarter; Bank of America had $1.5 billion in stores; Citi’s allowance for credit losses totaled $21.8 billion at the quarter’s end, more than tripling its credit reserve built from the prior quarter; and Wells Fargo had provisions of $1.24 billion.

A recent analysis by the New York Fed found that Americans owe a collective $17.7 trillion on consumer loans, student loans and mortgages. Credit card balances totaled $1.02 trillion in the first quarter of the year.

Credit card issuance and, subsequently, delinquency rates are also on the rise.

With rents up more than 30% nationwide (between 2019 and 2023) and grocery costs rising 25% in that same period, renters who did not lock in low rates and are struggling with rental prices that have exceeded wage growth are seeing the most stress in their monthly budget.

A recent survey found that 48% of Americans depend on credit cards to cover essential living expenses. As consumer’s pre-pandemic savings dwindle down, the reliance on credit for necessities, such as gas and groceries, has become the norm for many.

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If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Foreclosures, Timothy Kingcade Posts

Cities Can Sue over Predatory Mortgage Lending but the Standard is high

Posted on May 9, 2017by Admin

The U.S. Supreme Court ruled that cities can sue banks over predatory mortgage lending to minorities that harms municipal finances, but cast doubt on whether these cases can succeed by throwing out a lower court decision (ruling 8-0) that had allowed litigation brought by the city of Miami to even move forward.

Miami accused Wells Fargo, Bank of America and Citigroup into pushing “non-white” borrowers into higher-cost and riskier loans they often could not afford, even if they had decent credit. As a result of these alleged discriminatory lending practices, property values declined due to the high rate of loan defaults, which led to foreclosures. The city of Miami said it lost property tax revenue and was forced to pay to repair and maintain the properties that went into foreclosure.

Justice Stephen Breyer said Miami had the legal standing to sue the banks, but needed to present more evidence that the injuries it claims to have suffered were tied to alleged violations of the federal Fair Housing Act. Miami accused the banks of a decade of lending discrimination in its residential housing market. Los Angeles, Oakland and several other U.S. cities have filed similar lawsuits.

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

U.S. Bankruptcy Judge Fines Bank of America $45 Million

Posted on April 13, 2017by Admin

Judge Christopher Klein of the U.S. Bankruptcy Court in Sacramento issued a $45 million fine against Bank of America Corp., calling the treatment of a California couple who fought to save their home “brazen” and “heartless.” According to Judge Klein, the bank’s mortgage modification process and mistaken foreclosure on Erik and Renee Sundquist’s home left them in a “state of battle-fatigued demoralization.”

“It is apparent that the engine of Bank of America’s problem in this case is one of corporate culture… not rogue employees betraying an upstanding employer,” Judge Klein said. He added that he hopes the fine is large enough that it will not be “laughed off in the boardroom as petty cash or ‘chump change’.” Most of the money from the fine will go to law schools and consumer advocacy organizations.

The Sundquists’ financial troubles started in 2008 after their construction business closed down due to the economic downturn. The couple later bought a cheaper home outside of Sacramento and borrowed approximately $590,000 from a lender that was later taken over by Bank of America. After which, the bank promised them that they could request lower monthly payments. However, in 2009 when the couple stopped making payments, Bank of America officials said they would not consider a loan modification. Over the next few years, the couple requested loan modifications approximately 20 times. Each time their requests were “routinely either lost or declared insufficient, or incomplete or stale or in need of resubmission or denied without comprehensible explanation,” the ruling said.

In 2010 the couple filed for bankruptcy which halts foreclosure sales. However, the bank still improperly took over the home and gave them a three-day eviction notice. A few weeks after the couple moved out, Ms. Sundquist was hospitalized with stress-related heart attack symptoms.

Bank of America later reversed the sale but never formally notified the couple of the change. According to the ruling, they moved back in several months later.

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Foreclosures, Timothy Kingcade Posts

Supreme Court Examines Whether Miami Can Sue Banks over the Foreclosure Crisis

Posted on December 9, 2016by Admin

Should Bank of America and Wells Fargo be held responsible for potentially billions of dollars in tax revenue Miami and other cities lost after property values plunged in minority neighborhoods due to questionable lending practices and foreclosures?

That’s just one of the tough questions U.S. Supreme Court justices asked in oral arguments over Bank of America v. Miami, which tests the limits of who can sue under the expansive Fair Housing Act.

A series of probing questions from Justice Elena Kagan, the daughter of a housing attorney who served as Solicitor General in the Obama administration said the FHA is “a very peculiar and distinctive kind of anti-discrimination statute that focuses on community harms, not individual injuries,” she said.

The banks had it tough. A pair of Supreme Court precedents established that the FHA extends standing, or the right to sue, “to the full limits of Article III” of the Constitution, including cities and even non-profit organizations dedicated to fighting housing discrimination.

Last year in Texas Dept. of Housing v. Inclusive Communities, Justice Anthony Kennedy upheld the disparate-impact theory in FHA suits, allowing plaintiffs to prove discrimination with statistics instead of direct evidence of discriminatory intent.

Given these precedents, attorney Neal Katyal, arguing for the banks, conceded from the outset that cities can sue under the FHA. He argued Miami was pushing its theory too far, appropriating the injuries allegedly suffered by minority borrowers as its own. That violated the idea of proximate cause as well as the requirement that the lending discrimination falls within the “zone of interest” the city can enforce.

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Bankruptcy Law, Credit, Debt Relief, Foreclosures

Bank of America Accused of Racial Discrimination as Neglect of Foreclosures Worsens

Posted on September 9, 2016by Admin

The National Fair Housing Alliance (NFHA) and nine local fair housing organizations filed an amended discrimination complaint against Bank of America (BoA) this week. The complaint alleges illegal discrimination by BoA in African American and Latino neighborhoods in six additional cities. The cities include: Columbus, OH; Gary, IN; Minneapolis, MN; Newark, NJ; Tampa, FL; and neighborhoods in suburban Detroit.

“Bank of America’s deliberate neglect of its foreclosures in communities of color creates financial concerns as well as health and safety risks for people living near poorly-maintained foreclosed homes,” said Shanna L. Smith, President and CEO of NFHA. “Too many of these foreclosures have overgrown weeds, unsecured doors or windows, and debris left in the yard, creating perfect breeding grounds for rats, mice, snakes, and mosquitoes. Bank of America is exacerbating the risk of spreading the Zika virus in south Florida by allowing standing water to accumulate in pool covers, tires, and debris around these foreclosures.”

This new evidence formed the basis of the amended complaint. The complaint is now comprised of evidence from 1,267 BoA properties in 30 metropolitan areas and 201 cities throughout the United States.

Evidence obtained during the investigation reveals continued failure by Bank of America to perform simple and routine maintenance on its foreclosures in African American and Latino neighborhoods. This includes the failure to lock or secure doors and windows, remove trash and debris left by former owners, mow and edge lawns, trim shrubs, and cut back invasive plants.

On the contrary, the investigation revealed BoA keeps its foreclosures in white neighborhoods in good condition. Lawns are mowed and edged regularly, and BoA properly disposes of the belongings left behind by former owners. BoA is paid to perform these routine duties in all neighborhoods for all of its foreclosures.

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Bankruptcy Law, Foreclosures, Timothy Kingcade Posts

Former Bank of America Mortgage Employee Facing Prison Time for Taking Bribes

Posted on July 24, 2014by Admin

A former Bank of America mortgage employee has been sentenced to 30 months in prison for pocketing $1.2 million in payoffs to approve the sale of distressed properties for far less than their actual value.

Kevin Lauricella, 29, who has been cooperating with investigators, pled guilty to accepting bribes and falsifying bank records. He was sentenced by U.S. District Judge Otis D. Wright II in Los Angeles this week and was ordered to repay Bank of America $5.7 million in losses and to forfeit a Thousand Oaks home acquired through payouts from the criminal scheme.

Lauricella worked for a Bank of America division that handled delinquent home loans in 2010 and early 2011. During this time, lenders were overwhelmed by defaults on underwater mortgages, creating opportunities for insiders to exploit flaws in bank systems.

The crimes involved short sales. Lauricella collected bribes from so-called “flippers” who bought homes with the intent of quickly reselling them, Katzenstein admitted. He then issued approvals for short sales that were beyond his authority to approve, with sales prices far below the fair market value.

Lauricella made false entries in Bank of America’s computer system to make it appear that higher-ups had approved the short sales, Katzenstein said. When he pleaded guilty, Lauricella admitted approving fraudulent short sales for at least nine properties.

Related Resources:

http://www.latimes.com/la-fi-mortgage-bribe-sentencing-20140721-story.html

Bankruptcy Law, Credit, Timothy Kingcade Posts

BOA ordered to pay customers $727 million for illegal credit card actions

Posted on April 10, 2014by Admin

The Consumer Financial Protection Bureau (CFPB) has ordered Bank of America to pay $727 million to consumers who were misled by its credit card add-on products. The CFPB says 1.4 million consumers were affected by the bank’s deceptive marketing tactics and 1.9 million accounts were illegally charged for these credit monitoring products.

The CFPB’s complaint is alleging that from 2010 to 2012 Bank of America marketed “Credit Protection Plus” and “Credit Protection Deluxe,” two products said to help cancel some debt if a borrower was faced with financial hardship. According to the complaint, telemarketing scripts provided to BOA employees contained misstatements and omitted important information that misled consumers.

Bank of America has already reimbursed consumers for the unfair billing practices related to the identity protection products. For the credit protection products, remaining BOA customers will receive a credit to their accounts. Consumers are not required to take any action to receive their refunds.

Bank of America is also required to make a $20 million penalty payment to the CFPB’s Civil Penalty Fund. In addition, the Office of the Comptroller of Currency is ordering BOA to pay $25 million in civil money penalties for its unfair billing practices.

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If you have any questions on this topic or are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Foreclosures, Timothy Kingcade Posts

Top U.S. Banks Fail to Correct Foreclosure Abuse Practices

Posted on December 5, 2013by Admin

A report this week revealed that some of the top U.S. banks, including Bank of America and Citigroup, have failed to fully comply with the government settlement to correct mortgage servicing abuses. Bank of America failed to file accurate documents in bankruptcy proceedings and Citigroup’s mortgage unit failed to notify borrowers about missing documents within 30 days of a request for a short sale.

According to the monitor, the two banks have submitted plans to fix the problems and are in the process of correcting the failures. JPMorgan Chase was also cited in the recent report. The report revealed that the bank failed in some instances in 2013 to make decisions on borrower applications to modify loans within a timetable required, and it failed a test that measures whether a pre-foreclosure notice sent to customers was accurate.

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Foreclosures, Timothy Kingcade Posts

Bank of America Ordered to Pay $863.6 Million Following Fraud Verdict

Posted on November 11, 2013by Admin

The U.S. government has declared that Bank of America pay $863.6 million in damages after a federal jury found it liable for fraud over defective mortgages sold by its Countrywide unit. In addition, the government also asked for penalties against Rebecca Mairone, a former midlevel executive at the bank’s Countrywide unit who the jury also found liable.

The government said these penalties were necessary and it intends “to send a clear and unambiguous message that mortgage fraud for profit will not be tolerated.” Bank of America and Mairone were each found liable for defrauding government-controlled mortgage companies Fannie Mae and Freddie Mac through the sale of fraudulent loans purchased from Countrywide in 2007 and 2008. Mairone has since joined JPMorgan Chase & Co and denied any wrongdoing.

The government said that Countrywide’s program emphasized short term gains and rewarded employees for quantity over quality, eliminating checkpoints designed to ensure the loans were sound. The verdict has been considered a major victory for the U.S. Department of Justice, which has been criticized for failing to hold banks and individuals accountable for their roles in the events leading up to the 2008 financial crisis.

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