JPMorgan Chase (JPM: 46.08 -1.20%) reported $1.1 billion in first quarter risk management losses for newly implemented mortgage servicing practices.
The rising compliance costs come as a result of the Office of the Comptroller of the Currency and the Federal Reserve investigation into industry-wide foreclosure practices. A spokesman for Chase said the costs come in the form of an adjustment in the fair market value of the mortgage servicing rights.
The bank reported $5.6 billion in earnings for the quarter as expenses in the mortgage department went up. The bank's Chief Financial Officer Doug Braunstein said in a conference call with investors Wednesday morning that the first-quarter loss came from a "fair value adjustment for increased servicing costs." CEO Jaime Dimon said the costs do not include a direct fine or penalty.
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