Mortgage Securitization Probe Widens To Add Jp Morgan, UBS & Deutsche Bank
New York Attorney General Eric Schneiderman has added JP Morgan, UBS and Deutsche Bank to the expanded list of firms involved in the mortgage securitization probe, according to an article in Investment News and the Wall Street Journal. Already included in the investigation were Goldman Sachs, Bank of America and Morgan Stanley. Several bond insurers were also subpoenaed including Ambac Financial Group, MBIA Incorporated, Syncora Holdings Ltd and Assured Guaranty Ltd seeking documentation regarding mortgage origination, securitization and foreclosure procedures.
All 50 state attorneys general and the federal regulators have been investigating how the big financial firms have handled their home loans. Bank of America was among 14 of the nation’s largest mortgage servicers that signed consent orders to improve foreclosure practices, conduct reviews and pay back homeowners for losses from seizures that were mishandled, among other things. In 2010, Goldman paid a record fine of $550 million to settle SEC charges that failed to disclose to its investors that a hedge fund was involved in the structuring of the investment and betting it would fail.
In a related matter MBIA, the company that backed some of the worst debt securities, settled $19 billion worth of guarantees with 5 financial institutions since September 2010, resolving the obligations in one payment.