JPMorgan May Score $1.4 Billion Refund for WaMu Losses

[cory777]

Source: Daily Finance

By BETSY SCHIFFMAN Posted 9:10 AM 03/24/10

JPMorgan Chase (JPM) could bank a rich $1.4 billion tax refund this year, owing to Washington Mutual's 2008 losses and an oft-overlooked business tax break that was squeezed into the 2009 Stimulus Bill, according to a report in Wednesday's Wall Street Journal.

It's not a done deal yet -- JPMorgan is reportedly still negotiating with the Federal Deposit Insurance Corp. and its bondholders about the refund. But if all goes its way, the bank could reap up to $1.55 billion for taking over Washington Mutual's money-losing bank operations back in 2008. A portion of the total would be allocated to cover legal claims related to the takeover, but the rest -- $1.4 billion -- could go straight to JPMorgan's coffers.

Washington Mutual bondholders object to JPMorgan's claim, arguing that the bank already scored a handsome government loan under the TARP program, and bailout beneficiaries are not supposed to receive stimulus-related tax refunds. (JPMorgan repaid $25 billion in TARP funds in June 2009.) Also, given that JPMorgan paid a mere $1.9 billion for Washington Mutual in 2008, the tax break would essentially give the company most of its money back from that transaction.




Read more: http://www.dailyfinance.com/story/taxes/jpmorgan-may-score-1-4-billion-refund-for-wamu-losses/19412232/

[frazzled]

1. Well, they gave us some money for it ...

We had a mortgage with Washington Mutual, which of course went to Chase after the collapse of the former. So last fall Chase contacts mr. frazzled and asks if we'd like to refinance that mortgage. There's an application fee, but no other costs. I was skeptical that they were just going to keep our fee and turn us down (we're not that great of credit risks, and loans were supposedly scarcer than hen's teeth at the time). Besides, we hadn't asked for the refi--they were contacting us.

Quite some paper-work later, and to our suprise, they offered us the loan at the lower rate. It saves us several hundred dollars a month.

I'm not defending Chase on this. It's just hard for me to rag on them when they passed on some of their WaMu goodies to us.

[tooeyeten]

5. big surprise

they were so helpful, but look at the money they're making in those tax breaks.

[JustAnotherGen]

6. I'm not surprised they did that

I'm 37 and my parents opened my first savings account for me at the old Lincoln bank in Rochester NY. Chase bought them out at some point - and I'm viewed as a 30 year customer. I've played a game with Chase where I pay them off as I use their credit card (got it when I was 18), then wait a month - then pay it. No fees. BUT about a year and a half ago they raised my interest rate to 29%. I argued and gave up and used the card to buy a tank of gas a month, then would go home, go online, and pay it right off. In December they sent me a notification that they had reduced my interest level down to 16%. Don't get me wrong - I'm not going to stop playing my 'game' with them.

But I think there is an eensy weensy teensy bit of guilt on their part.

Not enough to turn down the do-re-mi - but just enough to start MAYBE doing the right thing.

Oh and they keep trying to offer me a small business loan. I don't need it (my venture is cash flush) - but I find it interesting that they keep trying to give me money. That's very unlike the rest of the banking world in regards to small upstarts at this time.

[mahatmakanejeeves]

2. I have some WaMu stock, so I should be getting my share

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[Xithras]

4. Same here.

I won't be expecting the postman anytime soon.

[bnymellon sucks]

3. Typical For Banks

This move is typical for banks. Find any loop hole to make a profit, use any loop hole to drag out litigation.

Want to see banks lie:
www.bnymellon-lies.com

[western mass]

8. Blame the banks?

How about blame the politicians that put the loophole there in the first place.

The Obama bailout: the gift that keeps on giving (to the bankers).

[tooeyeten]

7. question

Since there is no limit on bonuses, how much do you think will go into the pockets of the suits?

[progressoid]

9. Woohoo! The recovery is working!!