FHFA to Seek USD6 Billion in JPMorgan settlement
A US housing regulator had sought a minimum of USD6 million from JP Morgan Chase & Co. to settle civil claims. This was after the bank sold bad mortgage bonds to Fannie Mae and Freddie Mac, said a person who was familiar with the matter.
Two years ago, the Federal Housing Finance Agency (FHFA) sued JP Morgan and 17 other banks over faulty mortgage bonds. The agency had been trying to recoup losses that taxpayers had been forced to pay. This was after the government took over and rescued the failing mortgage company last 2008. State-backed Fannie Mae and Freddie Mac had taken USD187.5 billion federal aid since then. Both housing finance companies are regulated by FHFA.
Peter Garuccio, the spokesperson for FHFA decline to comment on the matter. Meanwhile, JP Morgan's spokesman Justin Perras also refused to give statements regarding the settlement claims.
Earlier today, the USD6 billion minimum settlement claims was reported by the Financial Times.