FILE: JPMorgan Chase reaches a tentative settlement with the U.S. Justice Department and other government agencies, agreeing to pay 13 billion dollars (USD) for selling investors bad mortgage loans

Record ID: 643550

  • Title: FILE: JPMorgan Chase reaches a tentative settlement with the U.S. Justice Department and other government agencies, agreeing to pay 13 billion dollars (USD) for selling investors bad mortgage loans
  • Date: 20th October 2013
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (FILE - SEPTEMBER 19, 2013) (REUTERS) JPMORGAN CHASE SIGN OUTSIDE BUILDING JPMORGAN CHASE BUILDING VARIOUS OF JPMORGAN CHASE SIGN DOORWAY TO JPMORGAN CHASE BUILDING JPMORGAN CHASE SIGN OUTSIDE BUILDING
  • Embargoed: 4th November 2013 12:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Crime,Business,Finance
  • Reuters ID: LVACWDCNF0VX2RO6VVR6EJVA0B1E
  • Story Text: JPMorgan Chase & Co has reached a tentative $13 billion (USD) deal with the U.S. Justice Department and other government agencies to settle investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source familiar with the talks said on Saturday (October 19).
    At issue in the settlement is whether the bank sold mortgages that it knew were riskier than they appeared.
    Investors, including government-owned mortgage agencies Fannie Mae and Freddie Mac, said that the bank told them loans were better than they actually were, or that the bank was negligent in accepting information from borrowers about their income and other matters at face value instead of verifying it.
    The tentative deal, the largest ever between the U.S. government and a single company, does not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors.
    That had been a major sticking point in the discussions, but the government refused to budge on that issue and JPMorgan felt it had no choice but to give in, according to a second source. Until recently, the most that JPMorgan was willing to pay was closer to $11 billion.
    The ongoing criminal investigation underscores how even if this settlement takes some heat off JPMorgan Chief Executive Jamie Dimon, he still has myriad regulatory issues to deal with.
    The biggest U.S. bank faces more than a dozen probes globally into everything from alleged bribery in China to a possible role in manipulating benchmark interest rates known as Libor.
    A Senate subcommittee report in March detailed how Dimon demanded that subordinates withhold data from one of the bank's regulators, the Office of the Comptroller of the Currency. Earlier this month, the bank said that Dimon was no longer chairman of JPMorgan's main U.S. retail banking subsidiary, which press reports said happened at the request of the OCC.
    The preliminary $13 billion settlement was reached after he spoke by phone on Friday night with U.S. Attorney General Eric Holder to finalize the broad outlines of the deal, the first source said.
    The settlement includes a $4 billion tentative deal with the Federal Housing Finance Agency that sources told Reuters about earlier this week.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2015. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register