Report: U.S. Banks to Cut Mortgage Exposure Amid Tighter Regulations (BAC, JPM, C, WFC)

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According to a Friday report by the Financial Times, several U.S.-based banks will begin limiting their mortgage servicing operations due to higher costs and increased requirements.

The Consumer Financial Protection Bureau (CFPB) was created by the government to provide oversight to the mortgage operations of major banks. That agency isn't permitting banks to commit so-called "robosigning" - the practice of agents processing foreclosure filings without even looking at the underlying paperwork.

Banks like Bank of America ( BAC ), JPMorgan ( JPM ), and Citigroup ( C ) have all reduced their loan servicing exposure in recent months, according to governmental filings. BAC slashed its loan servicing contracts by 8% in the past quarter, while JPM posted a 9% reduction, and Citi cut its contracts being held by home loan servicers by a whopping 19%.

Wells Fargo ( WFC ) was the only major U.S. bank to increase the number of home loan servicing contracts in the quarter.

The Bottom Line
Shares of Bank of America ( BAC ) have a .78% dividend yield, based on Wednesday's closing stock price of $5.14. The stock has technical support in the $4 price area. If the shares can firm up, we see overhead resistance around the $6-$7 price level. Shares of Citigroup ( C ) have a .17% dividend yield, based on Wednesday's closing stock price of $23.51. The stock has technical support in the $18-$21 price area. If the shares can firm up, we see overhead resistance around the $26-$28 price level. Shares of J.P. Morgan ( JPM ) have a 3.52% dividend yield, based on Wednesday's closing stock price of $28.38. The stock has technical support in the $23-$25 price area. If the shares can firm up, we see overhead resistance around the $31-$32 price levels.

None of the dividend stocks mentioned in this article are recommended at this time.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: BAC , C , JPM , WFC

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