Faulty mortgages and foreclosure abuses have cost the nation's five biggest home lenders at least $65.7 billion, according to a tally by Bloomberg News, and new claims may push the industrywide total to twice that amount.
Bank of America Corp., the largest U.S. lender, had the biggest costs, totaling $39.1 billion since the start of 2007, according to data compiled by Bloomberg. J.P. Morgan Chase & Co. followed with $16.3 billion, and Wells Fargo & Co., the biggest U.S. home lender, had $5.09 billion.
The costs have eclipsed predictions from bankers and analysts that lenders would suffer only modest damage from what Bank of America Chief Executive Officer Brian Moynihan has called "the mortgage mess."
Paul Miller, an FBR Capital Markets & Co. analyst, said costs for all banks could surpass $121 billion as the bill comes due for lax lending practices.
Bloomberg's tally was compiled from regulatory filings, company statements and financial presentations by the nation's five biggest mortgage lenders. The data cover provisions and expenses attributable to repurchases, foreclosure errors and abuses, payments to reimburse investors for lost value on faulty mortgages, legal settlements and litigation expenses.
The compilation also includes write-downs of assets, such as mortgage servicing rights, when the company attributed the loss in value to problems in mortgage underwriting or foreclosures and the costs of remedies. The figures may increase as more detailed breakdowns become available.
Miller, a former bank examiner, previously said costs might range from $54 billion to $106 billion for the banking industry. Under his new $121 billion estimate, which covers only repurchase costs, Bank of America, Wells Fargo, J.P. Morgan and Ally Financial Inc. will bear 60 percent of the burden, with Bank of America alone paying 33 percent.