In yet another settlement, the largest U.S. bank has reached an agreement regarding the sale of almost $18 billion in shoddy mortgage securities it sold during the financial crisis.
JPMorgan Chase & Co. has reached an agreement with Bear Stearns to settle a class action lawsuit regarding $17.6 billion in shoddy mortgage securities it sold during the financial crisis.
The bank, which purchased Bear in 2008, will pay $500 million to investors led by a group of pension funds, according to Reuters.
The case is separate from JPMorgan's $13 billion settlement with regulators in November 2013 over mortgage securities sales.
Investors said the offering documents from JPMorgan included false and misleading statements about the underwriting guidelines used by Bear's EMC Mortgage unit, Countrywide Home Loans and other lenders, and the accuracy of associated property appraisals, Reuters reported.
They added that nearly all the certificates were cut to "junk" status, but roughly 92%, or $16.2 billion, were once rated "triple-A."
The plaintiffs plan to seek preliminary approval of the settlement by Feb. 2.
