JPMorgan Chase & Co. announced today that it has reached a $13 billion settlement in principle negotiated by the President’s RMBS Working Group of the Financial Fraud Enforcement Task Force. Today’s settlement resolves actual and potential civil claims by the Department of Justice (DoJ), several State Attorneys General (State AGs), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Federal Housing Finance Agency (FHFA) relating to residential mortgage-backed securities (RMBS) activities by JPMorgan Chase, Bear Stearns and Washington Mutual.
Under the settlement, JPMorgan Chase will pay a total of $9 billion in cash and provide $4 billion in borrower relief. The cash portion consists of a $2 billion civil monetary penalty and $7 billion in compensatory payments, including a previously announced $4 billion payment to resolve FHFA’s litigation claims. Borrower relief will be in the form of principal reduction, forbearance and other direct benefits from various relief programs. JPMorgan Chase has committed to complete delivery of the promised relief to borrowers before the end of 2017.
JPMorgan Chase is fully reserved for this settlement.
Chairman and CEO Jamie Dimon commented: “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.”
The settlement concludes and terminates all pending civil enforcement investigations, including those by the Department of Justice and the State AGs from California, Delaware, Illinois, Massachusetts and New York, relating to RMBS activities by JPMorgan Chase, Bear Stearns and Washington Mutual.
The settlement also concludes and terminates all civil litigation claims brought by FDIC, FHFA and NCUA relating to securitizations of residential mortgage loans by JPMorgan Chase, Bear Stearns and Washington Mutual.