(Bloomberg News) JPMorgan Chase & Co. disclosed $1.3 billion of new expenses tied to faulty mortgages and foreclosures in its third quarter, pushing the bill for the five biggest home lenders since 2007 to almost $69 billion.
JPMorgan, the biggest U.S. bank by assets, set aside $314 million for buying back defective loans and incurred $1 billion in litigation costs caused mostly by mortgages, according to its Oct. 13 report. That brought the New York-based bank's total to at least $17.6 billion, according to data compiled by Bloomberg.
Cost are mounting as borrowers, investors and states accuse banks of sloppy lending and improper foreclosures. The total may top $120 billion because mortgage buyers such as Fannie Mae are becoming more aggressive, said Paul Miller, the FBR Capital Markets & Co. analyst, and claims are spreading to loans written after banks said they reformed their practices.
"This is still far from over," said Neil Barofsky, former inspector general for the U.S. Troubled Asset Relief Program. "These numbers are very high to begin with, but this is now an enormous overhang on the industry, and it's well deserved. Sooner or later the banks will pay the price for their behavior."