The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Wells Fargo, Ocwen Financial and Berkshire Hathaway

  The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Wells
                Fargo, Ocwen Financial and Berkshire Hathaway

PR Newswire

CHICAGO, June 21, 2013

CHICAGO, June 21, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include JPMorgan Chase & Co.
(NYSE:JPM-Free Report), Bank of America Corp (NYSE:BAC-Free Report), Wells
Fargo & Company (NYSE:WFC-Free Report), Ocwen Financial Corporation
(NYSE:OCN-Free Report) and Berkshire Hathaway Inc. (NYSE:BRK.B-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

Banks Infringe on Mortgage Pact

The verdict is out. Now, banks will need to gear themselves up and follow the
National Mortgage Settlement (NMS) deal servicing standards more precisely.

As per the report released by Joseph A. Smith, the independent monitor
overseeing the progress of NMS deal, all banks except for one have failed to
comply with the new servicing regulations. Last year, major mortgage servicers
– including JPMorgan Chase & Co. (NYSE:JPM-Free Report), Bank of America Corp
(NYSE:BAC-Free Report), Ally Financial Inc. and Wells Fargo & Company
(NYSE:WFC-Free Report), among others – signed an agreement with 49 state
attorney generals to improve their servicing standards and provide relief to
distressed borrowers.

These banks were required to assess their performance under the NMS deal, with
the help of 29 different metrics. Only Ally Financial, known as ResCap
Parties, whose mortgage servicing is now handled by Ocwen Financial
Corporation (NYSE:OCN-Free Report), Green Tree Servicing and Berkshire
Hathaway Inc. (NYSE:BRK.B-Free Report), fulfilled all the criteria.

JPMorgan had problems related to its failure to remove forced-placed insurance
and inability to notify borrowers about mortgage modification decisions in
time. Citigroup, on the other hand, failed to clear three metrics – one
requiring the dispatch of letters enclosing correct information to borrowers
prior to foreclosure and the other two demanding borrowers to be informed
about missing documents in time.

BofA lagged two metrics – collection of mortgage modification documents and
sending of the pre-foreclosure letter. Wells Fargo also failed with regard to
collection of the loan modification documents metric.

Further, roughly 60,000 complaints were received, the majority of which
criticized the absence of any single point of contact for distressed
borrowers.

However, the banks are striving to make amends and compensate the aggrieved
borrowers. Notably, if the problems persist, the NMS deal has provisions for
penalties and court actions. The banks will then be subject to penalties of up
to $5 million for each unfulfilled metric.

Moreover, lapses by the banks could prevent borrowers from making timely
payments, consequently causing them to lose their homes. This in turn, could
lead to higher foreclosure activity.

Though the banks have failed to conform to all servicing standards, problems
such as robo-signing and charging of high fees to process mortgage
modifications have significantly disappeared. Additionally, the banks are
providing more transparency and accountability while dealing with distressed
homeowners.

Moreover, both homeowners and banks are expected to benefit from the
resurgence in home prices. At the same time, banks are required to meet all
the servicing standards and fulfill their deal obligations. The stabilizing
housing sector, increase in jobs and low mortgage rates will likely make
homeowners avoid foreclosures.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

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