JPMorgan says settlement clears most liability in mortgage crisis
JPMorgan Chase & Co. said the $13 billion settlement it reached with the Justice Department, state attorneys general and other agencies erased most of its potential liability in the sale of faulty mortgage investments that fueled the 2008 financial crisis.
“Today’s settlement resolves actual and potential civil claims by the Department of Justice, several state attorneys general, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Federal Housing Finance Agency relating to residential mortgage-backed securities activities by JPMorgan Chase, Bear Stearns and Washington Mutual,” the company said in a news release.
Under the settlement, JPMorgan will pay $9 billion in cash and provide $4 billion in assistance to borrowers, including principal reduction and refinancing of mortgages at lower rates. The company said it is “fully reserved” for the settlement.
“We are pleased to have concluded this extensive agreement with the President’s RMBS Working Group and to have resolved the civil claims of the Department of Justice and others. Today’s settlement covers a very significant portion of legacy mortgage-backed securities-related issues for JPMorgan Chase, as well as Bear Stearns and Washington Mutual,” JPMorgan Chief Executive Jamie Dimon said in a statement.
The nation’s largest bank faces several unrelated lawsuits and criminal investigations from its vast business, not just its role in the housing bust.
The Justice Department’s news release on the settlement noted high up: “The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges.”
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