monday, 28 october of 2013

US government reaches $5.1 billion settlement with JPMorgan

JPMorgan

US government reaches $5.1 billion settlement with JPMorgan

The Federal Housing Finance Agency (FHFA), acting in its capacity as conservator for Freddie Mac and Fannie Mae, on Friday announced a $5.1 billion settlement with JPMorgan Chase & Co. The FHFA alleged that JPMorgan misrepresented the quality of the sub-prime mortgages and mortgage securities sold to Fannie Mae and Freddie Mac, which resulted in several billion dollars' worth of damages when the housing bubble collapsed in 2008.

JPMorgan settled representation and warranty claims for approximately $1.1 billion, with $480 million to Freddie Mac and $670 million to Fannie Mae, and is to pay $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae in a separate settlement to address allegations of violations of federal and state securities laws.

The FHFA sued 18 banks in 2011 for the misrepresentation of mortgage-backed securities in connection with the housing bubble and subsequent sub-prime mortgage crisis, resulting in more than $200 billion in losses for Fannie Mae and Freddie Mac. JPMorgan is the fourth company to reach a settlement with the FHFA. In July UBS settled with FHFA for $885 million. The FHFA also settled with Citigroup in May and General Electric in January for undisclosed amounts.

(Published by Jurist – October 26, 2013)

latest top stories

subscribe |  contact us |  sponsors |  migalhas in portuguese |  migalhas latinoamérica