JPMorgan Settles With FHFA for $5.1 Billion

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

JPMorgan Chase (NYSE: JPM  ) announced it had reached $5.1 billion in settlements with the Federal Housing Finance Agency (FHFA), Freddie Mac, and Fannie Mae, related to claims surrounding $33.8 billion of mortgage-backed securities purchased by Fannie Mae and Freddie Mac in the run-up to the housing bubble collapse.

Of the $5.1 billion in the settlement, $4 billion will be paid for violations of securities laws related to private-label mortgages purchased by Fannie Mae and Freddie Mac, which were sold by JPMorgan Chase, Bear Stearns, and Washington Mutual between 2005 and 2007. The remainder of the settlement is for representation and warranty claims associated with loans that Fannie Mae and Freddie Mac purchased between 2000 and 2008.

According to FHFA Acting Director Edward J. DeMarco:

The satisfactory resolution of the private-label securities litigation with J.P. Morgan Chase & Co. provides greater certainty in the marketplace, and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers. This is a significant step as the government and J. P. Morgan Chase move to address outstanding mortgage-related issues.

In the announcement, JPMorgan noted that the settlements "are an important step toward a broader resolution of the firm's MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies."

In its third-quarter earnings announcement, JPMorgan noted that it had set aside $9.2 billion for litigation reserves, and it was reported that it had also reached a settlement with the Justice Department for $13 billion last weekend.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2700693, ~/Articles/ArticleHandler.aspx, 9/27/2016 2:59:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,219.47 124.64 0.69%
S&P 500 2,158.33 12.23 0.57%
NASD 5,303.40 45.91 0.87%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 2:43 PM
JPM $66.24 Up +0.46 +0.70%
JPMorgan Chase CAPS Rating: ****