[ by Howard Haykin ]

The quarterly earnings season began today, with JPMorgan Chase & Co. and Wells Fargo & Co. first out of the gate.  Yet, before the 2 financial firms could stamp "final" on their numbers, U.S. regulators required each to charge-off hundreds of millions in home-equity loans and other mortgages to borrowers who filed for bankruptcy protection. 

JPMorgan wrote off $825 million in loans in the 3rd quarter, 87% of which were home-equity loans.  Guidance by the Office of the Comptroller of the Currency (OCC) led Wells Fargo to increase net loan charge-offs by $567 million.  It didn't affect quarterly earnings, howveer, because they were covered by reserves taken in prior quarters, according to a statement by Well Fargo.

JPMorgan CFO Doug Braunstein told reporters on a conference call that the bank "would expect, given the characteristics of the loans we were asked to charge off, that we will receive that value back in the form of principal payments over time."

For further details, go to:  [Bloomberg, 10/12/12].