JPMorgan Discloses $700 Million Earnings Hit
In late Monday morning press releases, Citigroup and US Bancorp (USB) said the foreclosure review will shave off $305 million and $80 million in fourth quarter earnings, respectively, as a result of the cash component of the settlement.
Citigroup will contribute a further $500 million and US Bancorp $128 million to mortgage assistance and loan modifications as part of the non-cash component of the settlement, they added in Monday morning press releases listed on their websites.
After the market close on Monday, Wells Fargo quantified the costs of the settlement to investors.
Wells Fargo said it will pay $766 million for the cash portion of the settlement, in a move that will create a $644 million charge to the company's fourth quarter earnings due on Friday. Wells Fargo added in the statement sent after the market close it will also commit a further $1.2 billion to foreclosure prevention actions, which the lender said has already been provisioned for.
"We are pleased that the regulators and servicers came together to reach this settlement, which will bring resolution to more borrowers in an expedited manner," Mike Heid, president of Wells Fargo Home Mortgage, said in an e-mailed statement.
Metlife(MET) said in an emailed statement sent to TheStreet that it will take a $37 million pre-tax hit to earnings it characterized as "not material to the company."
"MetLife has been fully cooperating with the OCC look back process and has agreed to join the settlement with the major banks. MetLife's portion of the $8.5 billion settlement is $37 million pre-tax and is not material to the company," John Calagna, a MetLife spokesperson, said in an e-mailed statement.
"We have not announced any associated charge against earnings at this time," Marcey Zwiebel, a spokesperson for PNC Financial, said in an email. "Our payment will be proportional to our customers' representation among the 3.8 million eligible borrowers, which is approximately 2 percent," the email added.
"We are pleased to have reached this agreement, and believe it represents an important step forward in resolving legacy mortgage issues," Michael McCoy, a SunTrust spokesperson, said in an e-mailed statement.
As part of the IFR settlement, the Fed and OCC said on Monday announced that the foreclosure review had ended, and that the servicers subject to the foreclosure settlement would make $8.5 billion in cash payments and other assistance to borrowers victimized by servicing errors.
Borrowers could receive up to $125,000 each, in a deal that is split between $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance such as modifications.