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A bankruptcy judge yesterday approved JPMorgan Chase & Co's $543 million deal to end two private lawsuits stemming from its relationship with convicted Ponzi scheme mastermind Bernard Madoff, Reuters reported today. A spokeswoman for the trustee liquidating Bernard L. Madoff Investment Securities LLC confirmed that Bankruptcy Judge Stuart Bernstein approved the agreement, which was made public on January 7, the same day federal authorities announced the bank had agreed to pay more than $2 billion to settle criminal charges related to the Madoff fraud. JPMorgan will pay $218 million to resolve class-action litigation and $325 million to resolve claims brought by the trustee Irving Picard.

Morgan Stanley and JPMorgan Chase & Co. agreed to pay $1.86 billion to end U.S. accusations of misconduct in their handling of home loans and related securities that left taxpayers shouldering losses after the financial crisis, Bloomberg News reported today. Morgan Stanley said yesterday it reached a $1.25 billion deal to end Federal Housing Finance Agency claims the bank sold faulty mortgage bonds to Fannie Mae and Freddie Mac before the firms’ losses pushed them into U.S. conservatorship. JPMorgan will pay $614 million after admitting it submitted ineligible loans for Federal Housing Administration and Veterans Affairs insurance. The six largest U.S. lenders have allocated more than $114 billion since the financial crisis to cover legal expenses, government probes and mortgage-related claims.

The House Financial Services Committee will hold a hearing at 10 a.m. ET today titled “The Impact of the Volcker Rule on Job Creators, Part II.” Scheduled witnesses include SEC Chair Mary Jo White, Federal Reserve Board Governor Daniel Tarullo, Comptroller of the Currency Thomas Curry, FDIC Chair Martin Gruenberg and CFTC Acting Chair Mark Wetjen. For more info, please click here: http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=36…

The Federal Reserve reported yesterday that banks in the U.S. saw increased demand from businesses and consumers for lending and in turn made those loans more readily available, Bloomberg News reported yesterday. “Domestic banks, on balance, reported having eased their lending standards on many types of business and consumer loans and having experienced increases in loan demand, on average, over the past three months,” the Fed said today in its quarterly survey of senior loan officers. The survey shows banks loosening the reins of credit for many categories of lending, including commercial real estate, commercial and industrial loans for firms of all sizes, credit cards, auto loans and other consumer loans. An exception was declining demand for mortgages. The report supports forecasts for stronger economic growth among Fed policy makers, who last week trimmed their monthly bond purchases to $65 billion from $75 billion. They see growth picking up this year to 2.8 percent to 3.2 percent, according to their most recent forecasts released in December.

Subprime mortgage lender Residential Capital LLC has reached an agreement with a group of insurers that guarantees a $150 million payment — part of parent-company Ally Financial Inc .'s larger $2.1 billion contribution — to its bankruptcy estate later this year, Dow Jones Daily Bankruptcy Review reported today. Pending approval of the settlement from Bankruptcy Judge Martin Glenn, Ally will pay ResCap's creditors the first $150 million it collects from insurance carriers within 30 days of receiving those funds. The remaining $1.95 million is to be paid in cash by Sept. 30. A hearing related to the settlement is scheduled for Feb. 20.

Bank of America Corp.’s $8.5 billion settlement with mortgage-bond investors, including BlackRock Inc. and Pacific Investment Management Co., was largely approved by a New York state judge, Bloomberg News reported on Saturday. Bank of New York Mellon Corp., the trustee for more than 500 residential mortgage-securitization trusts, filed a petition in June 2011 seeking approval of the settlement, which aimed to resolve claims that the loans backing the bonds didn’t meet their promised quality. For Bank of America, the settlement is part of Chief Executive Officer Brian Moynihan’s efforts to resolve liabilities tied to faulty mortgages that have cost the company at least $50 billion since the financial crisis, most inherited from its 2008 purchase of Countrywide Financial Corp.

More than half (58 percent) of financial institutions plan to raise fresh capital in 2014, according to a North American Distressed Debt Outlook survey put together by trade publication Debtwire and law firm Bingham McCutchen LLP, the Wall Street Journal reported today. That’s up from 43 percent of respondents to a similar survey last year. The survey queried professionals from 100 private equity firms, hedge funds, institutional investors and sell-side trading desks in November and December to give their outlook on the distressed picture for 2014. Hedge fund managers accounted for 40 percent of respondents, while the other investor types accounted for 20 percent each. Distressed debt and turnaround managers in private equity raised $36.64 billion across 43 funds in 2013, a 35 percent increase from the $27.18 billion collected by 32 funds 2012. (Subscription required.)
http://blogs.wsj.com/privateequity/2014/01/30/survey-says-more-than-hal…

To view the results of the survey, please click here: http://mergermarketgroup.com/wp-content/uploads/2014/01/North_American_…

U.S. officials said that Bank of America Corp.’s Countrywide unit should pay the maximum of $2.1 billion in penalties for selling defective mortgage loans to Fannie Mae and Freddie Mac in the run-up to the 2008 financial crisis, Bloomberg News reported yesterday. U.S. District Judge Jed Rakoff is considering how much to penalize the bank following months of arguments over the size of the civil fine that Charlotte, North Carolina-based Bank of America should pay in the first mortgage-fraud case brought by the U.S. to go trial. The bank has claimed it should have to pay $1.1 million at most. “To punish defendants for their culpability and bad faith, and to deter financial institutions and their executives who would engage in similar fraudulent mortgage schemes, the court should impose the maximum penalty,” Manhattan U.S. Attorney Preet Bharara said in a court filing yesterday. Countrywide is still a defendant in a securities fraud case brought by the Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, over billions of dollars in residential mortgage-based securities. Bank of America and Countrywide also face $10 billion in claims by American International Group Inc. over mortgage securities.

The Consumer Financial Protection Bureau (CFPB) on Wednesday sued mortgage giant PHH Corp. and its affiliates for allegedly collecting "hundreds of millions of dollars" in illegal mortgage insurance kickbacks starting as early as 1995, the National Law Journal reported yesterday. In an administrative suit, the agency alleged that consumers ended up paying inflated mortgage insurance premiums because of the scheme. It seeks a civil fine, a permanent injunction and victim restitution. The publicly traded company, based in New Jersey, closed $55.6 billion in mortgage financing during 2012 and services nearly 1.1 million loans, according to its website. The suit is the latest in a series brought by the consumer agency alleging violations of the Real Estate Settlements Procedures Act. Earlier this month, for example, Fidelity Financial Mortgage Corp. agreed to pay $81,000 for funneling allegedly illegal kickbacks to a bank in exchange for real estate referrals. In October, the agency sued law firm Borders & Borders in Louisville federal court for allegedly paying kickbacks for real estate settlement referrals through a network of shell companies. That case is pending.

Jefferies Group LLC, the investment bank owned by Leucadia National Corp. (LUK), agreed to pay $25 million to settle U.S. criminal and civil probes of suspected abuses in the trading of mortgage-backed securities after the financial crisis, Bloomberg News reported yesterday. The deal includes a non-prosecution agreement with the U.S. Attorney’s Office in Connecticut, Jefferies said yesterday in a regulatory filing. The company will pay $11 million to counterparties harmed in certain trades, $10 million to the U.S. Attorney’s Office and $4 million to resolve a parallel investigation by the Securities and Exchange Commission, subject to the agency’s final approval.