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JPMorgan Chase eyes record settlement

Staff writer ▼ | September 27, 2013
JPMorgan Chase is in talks to make the largest payment in the history of financial regulation to settle government investigations into its sales of mortgage-backed securities in the years before the financial crisis.
JPMorgan Chase
JPMorgan ChaseJPMorgan Chase is in talks to make the largest payment in the history of financial regulation to settle government investigations into its sales of mortgage-backed securities in the years before the financial crisis.


The bonds tanked after the housing bubble burst but the bank has resisted admitting its is guilty. Published reports say the huge deal would involve $7 billion in cash to the government and $4 billion in consumer relief for struggling homeowners. The agreement, which could be signed within days, involves multiple government agencies.

The $11 billion payment would be far higher than the initial amount the bank offered to pay the government earlier this week. The settlement might be more than double the previous record when BP paid out $4.5 billion following criminal charges related to the Gulf of Mexico oil spill. When he sued the bank, New York Attorney General Eric Schneiderman said it had committed "multiple fraudulent and deceptive acts" as it sold mortgage backed securities.

Another big bank, Citigroup, has agreed to pay $395 million to Freddie Mac to settle claims on home loans it sold to the government-controlled mortgage finance company. The agreement involves 3.7 million mortgages sold between 2000 and 2012. Citigroup agreed to pay $968 million to settle similar claims from Fannie Mae.


 

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