Today, JPMorgan Chase (NYSE:JPM) announced that it has reached a $4.5 billion agreement with 21 institutional investors surrounding legal claims related to its resident mortgage-backed securities (RMBS) trusts issued by JPMorgan Chase and Bear Stearns.
The agreement states that the institutional investors in the mortgage-backed securities trusts have requested that the trustees of the 330 trusts approve the settlement with JPMorgan Chase. According to JPMorgan, "This settlement is another important step in J.P. Morgan's efforts to resolve legacy related RMBS matters. The firm believes it is appropriately reserved for this and any remaining RMBS litigation matters."
JPMorgan Chase noted the 21 institutional investors "committed to support the settlement and have requested that the trustees accept the settlement offer." The settlement would resolve all servicing as well as representation and warranty claims related to the 330 trusts issued between 2005 and 2008. The release did note that any claims on trusts issued by Washington Mutual (which JPMorgan Chase also acquired) would not be covered under the terms of the settlement.
The institutional investors include BlackRock, Fannie Mae, Goldman Sachs, and other firms. Wells Fargo, Bank of New York Mellon, HSBC and other banks are among the trustees.
The offer of the settlement will remain open until Jan. 15, 2014, and may be extended for up to 60 days.