Not long after Bank of America (BofA) came under fire from three separate entities, one of which being the Department of Justice (DOJ), both MetLife and JPMorgan Chase are finding themselves in the DOJ’s crosshairs. There’s no historical record indicating that the DOJ has gone after three large entities all at once, however; in the case of BofA, the case was built over the course of a few years. Whether or not the cases against JPMorgan Chase and MetLife are similar remains to be seen.
In an SEC filing, it was revealed that MetLife received a subpoena back in May, which reads “requiring production of documents relating to MetLife Bank’s payment of certain foreclosure-related expenses to law firms and business entities affiliated with law firms and relating to MetLife Bank’s supervision of such payments, including expenses submitted to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corp. and the U.S. Department of Housing & Urban Development (HUD) for reimbursement. It is possible that various state or federal regulatory and law enforcement authorities may seek monetary penalties from MetLife Bank relating to foreclosure practices.”
MetLife may face substantial fines should the governmental probe find anything. “It is possible that various state or federal regulatory and law enforcement authorities may seek monetary penalties from MetLife Bank relating to foreclosure practices,” the insurer said in the filing.
JPMorgan Chase is the third bank under investigation by the DOJ, for charges of criminal practices related to sales of mortgage-backed bonds. “It is unprecedented that the Department of Justice has seriously considered criminal indictment of a major bank and I question whether it truly is,” said Professor John Coffee, of Columbia Law School to Bloomberg. “You can often bring dual investigations, civil and criminal, in order to maximize pressure for a global civil resolution.”
The indication is that the probes into JPMorgan Chase’s loans and mortgage-backed securities are product of JPMorgan, not the ones purchased from Bear Stearns Cos. and Washington Mutual back in 2008. “The Department of Justice is likely to be extremely cautious” in the criminal probe, Coffee said. “If they did anything, they might indict a subsidiary” or individual executives, he added.
With JPMorgan Chase, Bank of America and MetLife under fire from the Department of Justice and other government entities, one wonders what big bank is next?