On Friday, the nation's biggest bank agreed to pay $4.5bn to settle investors' claims that it sold them shoddy mortgages.
Whomever writes the checks at JPMorgan Chase must be getting hand cramps by now. On Friday, the nation's biggest bank agreed to pay $4.5bn to settle investors' claims that it sold them shoddy mortgages.
That's in addition to the $13bn JPMorgan has tentatively agreed to pay in a settlement with the Justice Department, also related to the bank's mortgage sales practices.
The Friday settlement was with a group of 21 institutional investors, according to a New York Times report. The money will go to trustees that oversee more than 300 residential mortgage-backed securities trusts.
“This settlement is another important step in JPMorgan’s efforts to resolve legacy related (residential mortgage-backed securities) matters,” JPMorgan said in a news release. “The firm believes it is appropriately reserved for this and any remaining R.M.B.S. litigation matters.”
According to the Times, Friday's deal concerns mortgage-backed securities sold by JPMorgan between 2005 and 2008, along with mortgage bonds sold by Bear Stearns, which JPMorgan bought during the financial crisis. The same group earlier reached an $8.5bn settlement with Bank of America, the Times reported.
Friday's settlement hardly spells the end of JPMorgan's legal troubles. The lending giant still faces numerous lawsuits -- including pending litigation over $100bn worth of residential mortgage-backed securities, according to the Times. The bank has set aside $23bn as a hedge against expected litigation costs.