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Tuesday’s Headlines: BofA and JPMorgan Chase’s foreclosure units are understaffed

Understaffed

JPMorgan Chase and Bank of America struggled to hire and retain qualified staffers to plow through the masses of foreclosure applications, the banks admitted to regulators. The Federal Reserve has been investigating customer complaints about banks’ administrative mixups that cost some of them their homes. Bloomberg details the mess in an article, in which JPMorgan Chase admits it “hired representatives with little or no home lending industry experience,” and Bank of America “said compliance operations were understaffed as of mid-year 2011 and that some people lacked the skills or stature needed to do their jobs.”

Bank of America had announced plans to grow its risk staff by 30 percent to 236 by the end of 2011, and by more than 40 percent in compliance to 308 people. The report found that some compliance staff still required training to ensure their independence. JPMorgan Chase’s new training program for its default underwriting staff has so far been taken by 2,900 employees, whose average score on a test improved to 92.2 percent from 81.7 percent.

Meanwhile, Wells Fargo plans to hire a new chief compliance officer and an exec to oversee risk associated with third-party hiring. In response to the foreclosure processing complaints, Citigroup has filled 880 new full-time operations positions, including a chief customer officer.

 

Other News:

Morgan Stanley traders lost money on 64 days last year, compared with 38 days in 2010. [Bloomberg]

Guggenheim Partners is in talks to buy Deutsche’s asset management divisions. [Financial Times]

Banco BTG Pactual named Goldman and J.P. Morgan to work on its IPO. [Businessweek]

RBS is shutting its Australian fixed income desk and some of the 80 employees can move to Singapore or London. [Reuters]

Fortress Investment swung to a Q4 loss on a drop in incentive income. [WSJ]

The FBI will be working on insider trading cases for at least five years. [Businessweek]

Banco Santander will buy Kredyt Bank, the Polish lender owned by KBC Groep, with plans to combine it with its Polish operations. [Bloomberg]

American banks could increase dividends and share buybacks to an average of 47 percent. [WSJ]

Barclays was fined $791 million after the British government shut down its tax-avoiding strategies. [WSJ]

A high-end rehab center opened in East Hampton where Wall Streeters sober up. [Businessweek]

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