JPMorgan nearing settlement with government on mortgage backed securities

September 28
9:59 PM 2013

A multibillion dollar deal may be reached between JPMorgan Chase & Co and investigators conducting the multibillion dollar mortgage securities fraud probe. This was confirmed by the New York Post in its Saturday edition.

Government officers as well as bank officials met early this week in the hope that a settlement can be negotiated in the USD11 bullion range to resolve many of the issues regarding the bank's conduct on mortgage bonds before the financial crisis. This was confirmed by a source with Reuters who had knowledge and familiarity with the negotiations.

The figures being negotiated would see JPMorgan paying USD7 billion in cash and USD4 billion in consumer relief. This though is but half of the bank's profit of USD21 billion in 2012. 

US Attorney General Eric Holder met with JPMorgan CEO last Thursday. This is an unusual event, since it is rare that a company's CEO meets with the head of the US Department of Justice. The move was needed though as the bank was seeking to decrease its legal difficulties for the leong run,

Should the settlement push through, this would include claims from the regulator of Fannie Mae and Freddie Mac, who had been seeking USD6 billion from the bank due to the mortgage securities sold to government sponsored entities.

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