Report: JPM, Justice Dept. reach $13B settlement

Oct. 19, 2013 at 8:25 PM
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WASHINGTON, Oct. 19 (UPI) -- JPMorgan Chase & Co. has tentatively agreed to pay $13 billion to settle civil complaints in its mortgage securities business, U.S. officials said.

The tentative agreement with the U.S. Department of Justice would resolve multiple investigations into conduct between 2005 and 2007 -- but does not cover a federal criminal investigation of the nation's biggest bank, CNN reported Saturday, citing a U.S. official familiar with the matter.

Mortgage-backed securities were a significant factor in the 2008 financial meltdown that led to the worst recession since the Great Depression.

The New York Times, The Washington Post and others also reported the $13 billion settlement agreement.

CNN's source said the agreement calls for JPMorgan Chase to pay $9 billion in fines and penalties and $4 billion in consumer relief, including home loan modifications. The agreement includes $4 billion to settle complaints that the bank misled the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) in selling home loans to the agencies.

The official said the bank has agreed to provide assistance as investigators consider charging individuals.

JP Morgan Chase declined to comment on the report, CNN said.

The bank agreed this week to pay $100 million and admit wrongdoing after its London traders lost $6.2 billion in bad derivative bets, the Commodity Futures Trading Commission said. That agreement came one month after the bank paid $920 million to four other regulators, including the Securities and Exchange Commission.

Those payments brought JPMorgan's tally of government fines in the trading loss debacle to more than $1 billion.

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