The Zacks Analyst Blog Highlights: Fannie Mae, Freddie Mac, JPMorgan Chase, Wells Fargo and Bank of America

Jan 06, 2014, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Jan. 6, 2014 /PRNewswire/ -- 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 the Fannie Mae (OTCBB:FNMA-Free Report), Freddie Mac (OTCBB:FMCC-Free Report), JPMorgan Chase & Co. (NYSE: JPM-Free Report), Wells Fargo & Company (NYSE: WFC-Free Report) and Bank of America Corp. (NYSE: BAC-Free Report).


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

Here are highlights from Friday's Analyst Blog:

FHFA Recovers $8B from RMBS Settlements

After more than two years of filing lawsuits against 18 major financial institutions, the Federal Housing Finance Agency (FHFA) has recovered approximately $8 billion for taxpayers. While filing the lawsuit in Sep 2011, the FHFA had accused the banks of violating several federal securities laws and common law while selling $200 billion worth of residential mortgage-backed securities (RMBS) to Fannie Mae (OTCBB:FNMA-Free Report) and Freddie Mac (OTCBB:FMCC-Free Report) in 2005–2007.

The financial institutions that have settled these charges include JPMorgan Chase & Co. (NYSE: JPM-Free Report), from which the biggest amount was recovered by the FHFA ($4.0 billion). The financial terms of settlements with several other banks were not revealed, as the FHFA continued the process of negotiations.

Additionally, Wells Fargo & Company (NYSE: WFC-Free Report), which was not part of the above-mentioned litigation, agreed to settle similar charges for $335.2 million in Nov 2013. Wells Fargo was able to evade the lawsuit as its lawyers were already in negotiation with the FHFA regarding a settlement.

The litigation is still pending against 12 banks including Bank of America Corp. (NYSE: BAC-Free Report), which next in line to settle the charges is expected to be BofA as a federal court in Manhattan will be hearing the case in June. The FHFA is seeking roughly $6 billion from BofA along with Countrywide Financial Corp. and Merrill Lynch & Co. (these two acquired in 2008) to settle the charges.

Such settlements are expected to aid in further revival of the economy. Moreover, such moves by banks demonstrate their aim to resolve all mortgage-related issues, thereby reducing costs over the upcoming period. Alongside, these strategic decisions are likely to bode well for banks and boost investors' confidence as well.

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

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