JPMorgan Chase & Co.’s has entered into an agreement with the US Department of Justice to pay US$13 billion to resolve probes into housing-bubble mortgage-backed securities and other home-loan related practices.
The settlement would not eliminate any pending criminal probes into the New York-based bank, but would end the bulk of civil actions related to mortgage-backed securities issued by JPMorgan.
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The deal could result in charges against individuals and could increase the fine for JPMorgan Chase.
The agreement concludes a civil probe by the California attorney general over the bank’s sale of mortgage-backed securities (MBS) to Fannie Mae and Freddie Mac from 2005 to 2007, as well as the New York attorney general’s probe of Bear Stearns’ sale of MBSs to these two companies.
If the deal is completed, US$4 billion would settle allegations by the Federal Housing Finance Agency, another US$4 billion would be destined for consumer relief, and US$5 billion would be paid in penalties.
The agreement would also resolve a pending enquires filed by New York’s Attorney General Eric Schneiderman.
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By GlobalDataIf confirmed, the deal would be the largest ever amount paid by a US company in this type of settlement with the government.
The firm has set aside US$8 billion of US$28 billion in reserves since 2010 to cover its legal expenses.
