JPMorgan Chase reportedly settles with FHFA for $4B
The Federal Housing Finance Agency reportedly secured another large settlement with a mega bank over legacy mortgage issues – this time, a $4 billion deal with JPMorgan Chase & Co. (JPM). The case revolves around claims that JPM misrepresented the quality of loans it sold off to Fannie Mae and Freddie Mac.
The mega bank reportedly entered into a tentative $4 billion agreement to settle the issue, the Wall Street Journal reported Friday. The paper says the FHFA actually sought $6 billion.
Spokerspersons for FHFA and JPMorgan Chase declined to comment.
Back in 2011, more than a dozen banks – including Bank of America (BAC), Citigroup (C) and JPMorgan Chase – were named defendants in numerous lawsuits that accused the mega banks of selling mortgage-backed securities backed by toxic loans to the GSEs.
The conservator for the GSEs settled with UBS Americas for nearly $1 billion over the summer, with UBS agreeing to pay FHFA $885 million.
Not long after the UBS suit, analysts with Morgan Stanley speculated that Bank of America may settle with the Federal Housing Finance Agency for anywhere between $2 billion to $3.6 billion.