What a Relief?

Of the total settlement, $4 billion will come in the form of JPMorgan's assistance to distressed homeowners. That includes $2 billion in principal write-downs, as well as $2 billion in financial relief for borrowers and communities, including refinancing mortgage loans at lower rates, donation of repossessed properties, and new mortgage loans to low-and moderate-income families harmed by the financial crisis.

This means some of the government's work will alleviate financial burdens some families continue to carry from the financial crisis. Attorney General Eric Holder indicated relief could come to thousands of borrowers.

A portion of the settlement going to New York State will include "$613 million in cash and approximately $400 million in consumer relief for struggling New Yorkers." Some of the $613 cash payment would be "directed to provide additional legal services and housing counseling for those affected by Superstorm Sandy," according to Schneiderman.

Bill Cheney, CEO of the Credit Union National Association, said in a Tuesday telephone interview he was pleased that credit unions would see some restitution for shaky mortgage securities they bought from JPMorgan.

"One could certainly argue that it could have been more," Cheney said. "Having said that, we are happy with the settlement," he added.

The Analysts

"Issues remaining include an ongoing criminal DOJ investigation, as well as several civil issues, such as monoline claims, FHA insurance-related claims and other litigations. We would note that the company likely has nearly $10bn of litigation reserves available post these actions. Overall, the financial aspects of these effects are already largely accounted for," Moshe Orenbuch, a banking analyst at Credit Suisse, said in a Wednesday client note.

"The aggregate settlement of $13B, together with the previously announced $4.5B Gibbs & Bruns settlement tied to certain RMBS, was squarely within expectations," Sterne Agee analyst Todd Hagerman, said in a Tuesday client note.

"The announcement represents an important step in formally reducing JPM's legacy mortgage-related exposures. Although the magnitude of the legal settlements in recent weeks has been staggering in the very least, our sense is investors will now begin to hang their hats on the notion that the largest banks, including JPM, are clearly in the later innings in resolving legacy mortgage-related exposure," Hagerman added.

JPMorgan shares were falling less than 1% in early Wednesday trading, to $55.94.

Interested in more on JPMorgan Chase? See TheStreet Ratings' report card for this stock.

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-- Written by Antoine Gara in New York

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