News / Economy

JP Morgan Agrees to Record $13 Billion Settlement

FILE - The JPMorgan Chase & Co. logo is displayed at their headquarters in New York, Oct. 21, 2013.
FILE - The JPMorgan Chase & Co. logo is displayed at their headquarters in New York, Oct. 21, 2013.
Reuters
JP Morgan Chase & Co. admitted it regularly overstated the quality of mortgages it sold to investors and agreed to pay a record $13 billion to resolve related charges, federal officials said on Tuesday.
 
The civil settlement would mark the end of weeks of tense negotiations between JPMorgan Chase, the largest U.S. bank, and government agencies that are under pressure to hold banks accountable for wrongdoing that led to the housing crisis.
 
For JP Morgan, the deal resolves some of the welter of investigations it is dealing with now. But even after the settlement, the bank faces at least nine other government probes, covering everything from its hiring practices in China to whether it manipulated the Libor benchmark interest rate.
 
JP Morgan said last month that it has set aside $23 billion to cover litigation expenses. Its share rose 0.9 percent to $56.22.
 
For this settlement, JPMorgan took the unusual step of acknowledging that its employees knowingly sold loans to investors that were shakier than the bank claimed.
 
Due diligence firms that reviewed those loans for JP Morgan in 2006 and 2007 deemed that 27 percent of them were failing, but the bank still packaged at least half of those into mortgage securities, the government said.
 
The government called the settlement the largest in U.S. history, but the deal is really several rolled into one. It includes a $4 billion relief package with U.S. Department of Housing and Urban Development, and a $4 billion settlement with the Federal Housing Finance Agency, which oversees government mortgage financing companies Fannie Mae and Freddie Mac.
 
JP Morgan and government agencies led by the Justice Department reached a tentative agreement in mid-October and have been hammering out details since then. New York Attorney General Eric Schneiderman was also involved in discussions.
 
Of the $4 billion settlement with HUD, at least $1.5 billion will go toward loans the bank is forgiving. As much as $500 million will go to change the terms of loans to lower monthly payments.
 
The remaining $2 billion will be for assorted purposes, including new loans for low- and moderate-income borrowers in areas that have been hard-hit by the housing crisis and for demolition of abandoned homes, a source said.
 
JP Morgan's negotiations with the Justice Department began in earnest last spring, after Justice Department lawyers in California preliminarily concluded that the bank had violated U.S. civil laws. The Justice Department had looked into mortgage bonds the bank sold from 2005 through 2007, the company said in August.
 
Government lawyers had prepared to file a lawsuit against JP Morgan in September and scheduled a news conference to announce it. But they canceled it at the last minute as JP Morgan reached out to government officials to discuss a settlement. JP Morgan Chief Executive Jamie Dimon met U.S. Attorney General Eric Holder later that month to talk about a deal on mortgage probes.

You May Like

Forest Stands Between Nigeria, Victory Over Boko Haram

Military takes back nearly all towns, villages in northeast, except for massive expanse of forest that spreads thousands of square kilometers over several states More

IS Recruiting Stokes Fears for Parents in Georgia

Chechens are notable part of Islamic State's gains in Syria and Iraq, and analysts fear what might happen if those fighters return to Caucasus More

Yarmouk Camp Becomes Distant Memory for Palestinian Diaspora

Once thriving capital of Palestinian diaspora, after siege by Syrian government forces and Islamic State group, camp becomes 'deepest circle of hell' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Armenia and Politics of Word 'Genocide'i
X
Sharon Behn
April 21, 2015 9:18 PM
A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten. Sharon Behn reports on the politics of the word genocide on the 100th anniversary of the events.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video German Program Helps Migrants Overcome Traumatic Experience at Sea

Migrants fleeing poverty and violence in parts of Africa, the Middle East and Asia risk life and limb to reach safety in Europe. Those who have made it to European shores are traumatized by the experience. A program in Germany helps survivors overcome the trauma by giving a new perspective to their catastrophic experience. Zlatica Hoke reports.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video Hope, Prayer Enter Fight Against S. Africa Xenophobia

South Africa has been swept by disturbing attacks on foreign nationals. Some blame the attacks on a legacy of colonialism, while others say the economy is to blame. Whatever the cause, ordinary South Africans - and South African residents from around the world - say they're praying for the siege of violence to end. Anita Powell reports from Johannesburg.
Video

Video New Test Set to Be Game Changer in Eradicating Malaria

The World Health Organization estimates 3.4 billion people are at risk of malaria, with children under the age of five and pregnant women being the most vulnerable. As World Malaria Day approaches (April 25), mortality rates are falling, and a new test -- well into the last stage of trials -- is having positive results in Kenya. Lenny Ruvaga reports for VOA from Nairobi.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.

VOA Blogs

World Currencies

EUR
USD
0.9345
JPY
USD
119.39
GBP
USD
0.6716
CAD
USD
1.2228
INR
USD
62.905

Rates may not be current.