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JPMorgan, DOJ reach $13bn settlement
By Presstv.com
JPMorgan Chase and the
US Justice Department have reached a $13 billion settlement over the
bank’s civil mortgage-bond related matters, according to people familiar
with settlement talks.
The US largest bank is expected to pay about $9 billion in fines over its sale of troubled mortgage securities to investors. It will also spend $4 billion in relief for struggling homeowners, the New York Times said, citing the people.
The settlement amount is $2 billion dollars more than what the bank had initially offered.
According to the newspaper, the accord was reached late on Friday after Attorney General Eric H. Holder Jr. spoke on the phone to the bank’s top executives. But the deal could still far apart as the final details are being negotiated.
JPMorgan is the target of investigations in the US and abroad. It has tapped $8 billion of $28 billion in reserves set aside since 2010 to cover its legal costs, according to The Washington Post.
The Post noted that the Friday deal “will probably require the bank to cooperate in criminal investigations of individuals tied to wrongdoing associated with the bank’s mortgage practices.”
The Federal Housing Finance Agency sued JPMorgan and 17 other banks over faulty mortgage bonds two years ago in an effort to recoup some of the losses taxpayers were forced to cover when the government took control of the failing mortgage finance companies in 2008.
Fannie Mae and Freddie Mac, being regulated by FHFA, have taken $187.5 billion in federal aid since 2008.
