JPMorgan Chase has reached a tentative $13 billion deal to settle charges with the Justice Department and other regulators over mortgage-backed securities, according to reports.<\/p>\n
The Wall Street Journal<\/i> reported on Saturday [19 Oct 2013] that the terms of the deal, which has yet to be finalized, were reached in a Friday night phone call between Attorney General Eric Holder and the bank\u2019s top lawyer, Stephen Cutler.<\/p>\n
The settlement reportedly does not release JPMorgan from criminal liability.<\/p>\n
The bank, which is the largest in the nation, has also agreed to cooperate with criminal probes into people involved with the bonds during the height of the housing boom.<\/p>\n
The settlement reportedly does not cover criminal probes into ways that the bank, which is the largest in the nation, issued the bonds during the height of the housing boom.<\/p>\n
Those securities collapsed when the housing bubble burst, leading up to the financial crisis.<\/p>\n
Under the terms of the deal, the bank would pay abut $9 billion in fines and spend another $4 billion to give relief to struggling consumers, according to The New York Times.<\/p>\n
The settlement is larger than an anticipated agreement that was expected to include a $7 billion cash fine as well as the money to relieve homeowners.<\/p>\n
The deal is larger than the $11 billion anticipated settlement, which was expected to include a $7 billion cash fine and $4 billion in consumer relief.<\/p>\n
It would be the largest financial settlement the U.S. has ever reached with a single company.<\/p>\n
Reports about the deal emerged shortly after news agencies reported that the bank had reached a $4 billion deal with the Federal Housing Finance Agency (FHFA) over charges that JPMorgan misled Fannie Mae and Freddie Mac about the quality of mortgages it sold them.<\/p>\n
FHFA had sued the bank for making false statements about $33 billion worth of mortgage bonds two years ago. Reuters<\/b><\/a> notes that the $4 penalty would amount to a payment of 12 cents on the dollar. That agreement is reportedly a part of the $13 billion settlement.<\/p>\n The bank may also be on the hook for troubled mortgage deals done by two institutions that it took over during the crisis, Washington Mutual and Bear Stearns.<\/p>\n Last month, JPMorgan Chase head Jamie Dimon was spotted at the Justice Department headquarters in Washington on his way to discuss terms of the settlement.<\/p>\n The Wall Street Journal<\/i> also reported that JPMorgan reached a separate deal with the National Credit Union Administration, though the terms have not yet been revealed.<\/p>\n A Justice Department official could not immediately comment about the settlement.<\/p>\n