Quantcast
Get breaking news alerts via email

Click here to manage your alerts
(AP Photo/Mark Lennihan) Moody’s Investors Service said banks such as JPMorgan Chase and Goldman Sachs were downgraded because the agency is growing more concerned about the ability of the banks to repay their debts.
JPMorgan to pay Fannie, Freddie regulator $5.1 billion over mortgages
First Published Oct 25 2013 04:34 pm • Last Updated Oct 25 2013 04:33 pm

NEW YORK - JPMorgan Chase & Co. will pay $5.1 billion to resolve claims over faulty investments sold to mortgage giants Fannie Mae and Freddie Mac in the lead-up to the financial crisis.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the deal late Friday.

Join the Discussion
Post a Comment

The $5.1 billion sum is part of a total $13 billion settlement between JPMorgan and the federal government that has been in the works and which could be announced in coming days. The timing was still unclear, according to a person familiar with the matter but who was not authorized to speak publicly.

The agreement would resolve claims that JPMorgan and two troubled banks it purchased during the financial crisis - Bear Stearns and Washington Mutual - packaged bad loans and then sold residential mortgage-backed securities that later went south.

Under the deal, JPMorgan will pay $2.74 billion to Freddie and $1.26 billion to Fannie. In a separate settlement, the bank will also resolve "representation and warranty claims" by paying $1.1 billion more to both entities.

"This is a significant step as the government and J.P. Morgan Chase move to address outstanding mortgage-related issues," Edward DeMarco, the FHFA’s acting director, said in a statement. "Further, I am pleased that a resolution of single family, whole loan representation and warranty claims could be achieved at the same time. This, too, will have a beneficial impact for taxpayers and the housing finance market."

In a statement, JPMorgan said the settlement would resolve the bank’s largest case involving mortgage-backed securities. The claims relate to about $33.8 billion in mortgage securities Fannie and Freddie purchased from JPMorgan as well as Bear Stearns and Washington Mutual.

"Today’s settlements totaling $5.1 billion are an important step towards a broader resolution of the firm’s MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies," JPMorgan said in a statement.

The settlement announced Friday does not include $4 billion of the broader $13 billion settlement earmarked for homeowner relief, said the person familiar with the matter.




Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.