Investments

Bank of America net income drops nearly 50% after tax reform

But pretax earnings rose 17%
Bank of America reported its net income dropped in the final quarter of 2017 due to expenses from tax reform, however without these expenses, its earnings surged 17%. The bank’s CEO said the company had a positive year, claiming, “We invested in technology, client engagement, and in our own team, including the $1,000 bonus we announced last month for 145,000 employees.”
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Citigroup reports net loss in Q4 due to tax reform

Citi mortgage improvements push net credit losses down $30 million
Citigroup reported a net loss during the fourth quarter of 2017 after taking a hit from the Tax Cuts and Jobs Act. Tax reform caused the bank to pay $19 billion related to the re-measurement of its deferred tax assets arising from a lower U.S. corporate tax rate.
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JPMorgan net income plummets 37% due to tax reform

Before tax reform net income fell 1%
JPMorgan Chase reported a decrease in its earnings in the fourth quarter of 2017 as the company experienced impacts from the recently enacted Tax Cuts and Jobs Act. The company reported a net income of $4.2 billion in the fourth quarter of 2017, down 37% from $6.73 billion in the third quarter and in the fourth quarter of 2016.
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Wells Fargo pays $3.25 billion in Q4 for mortgage regulatory investigations, sales practices

Mortgage banking creates pull on bank’s income
2017 has been quite a year for Wells Fargo, as it continued to face fallout from its massive fake accounts scandal. Now, the bank’s fourth quarter earnings show Wells Fargo paid a total of $3.25 billion in pre-tax expenses for litigation accruals on a variety of matters including mortgage-related regulatory investigations, sales practices and other consumer-related matters.
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Angel Oak raises nearly $300 million to invest in non-QM lending

Private capital fund ready to buy mortgages
It appears that private capital’s interest in mortgages that don’t fit into the Qualified Mortgage box is growing. Angel Oak Capital Advisors, an investment management firm that specializes in mortgage credit, announced this week that it raised nearly $300 million to invest in non-QM lending.
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S&P: Mortgage bond issuance doubled in 2017, will continue rising in 2018

RMBS issuance jumped from $34 billion in 2016 to $70 billion in 2017
Back in June, Standard & Poor’s Global Ratings said that 2017 was on track to be the best year for the residential mortgage-backed security market since 2013. Now that the final numbers are in, it looks like 2017’s mortgage bond issuance exceeded even the sunniest of forecasts.
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Fannie Mae makes more information available for risk-sharing investors

Will now make monthly loan-level disclosure data on for CIRT deals
A recent report suggested that the government-sponsored enterprises’ risk-sharing deals will be a big target for investors in 2018. In order to provide investors with as much detail as possible, Fannie Mae announced this week that it is making additional disclosures about some of its risk-sharing deals.
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