News Column

JPMorgan Settles for $13 Billion

November 19, 2013

UPI Business News

JPMorgan Chase and the U.S. Justice Department have agreed to a historic $13 billion settlement, sources told The Wall Street Journal.

The settlement -- the largest ever involving just one company -- resolves the department's complaints concerning mortgage-backed securities that soured in advance of the financial crisis that triggered the U.S. recession.

The deal, which is expected to be announced this week, was held up by the final piece of the agreement, which was $4 billion to be designated as help for homeowners that the bank can distribute in a variety of ways, including spending money demolishing abandoned homes in an effort to help neighborhoods hit by urban blight due to foreclosures.

At least $1.5 billion and as much as $1.7 billion has been designated as money to go to reduction of principal on mortgages held by JPMorgan that can be applied to loans considered underwater, meaning loans in which there is more owed on the loan than the house is worth.

About $2 billion has been earmarked for loan origination for families in need or for principal reduction on homes that have been abandoned, but have not yet been seized by the bank, the Journal said.

The settlement concludes one more legal dispute for the largest U.S. bank, but others remain, including investigations of energy market manipulation, possible misconduct that resulted in $6 billion in trading losses in 2012, and complicity in the Bernard Madoff Ponzi scheme in the form of ignoring red flags about Madoff's operations.

In addition, private lawsuits are hounding the bank, including a $10 billion lawsuit brought by Deutsche Bank National Trust Co. concerning securities issued by Washington Mutual, which JPMorgan absorbed in 2008.

Copyright 2013 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.

Original headline: JPMorgan settlement largest ever for one firm: $13 billion


For more stories covering business, please see HispanicBusiness' Business Channel



Source: Copyright 2013 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.


Story Tools