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JP Morgan Chase, the largest U.S. bank by assets, agreed Friday to pay 5.1 billion U.S. dollars in settlements with the Federal Housing Finance Agency (FHFA) to address claims of mis-selling mortgage-backed securities and home loans before the 2008 financial crisis.
The settlements include 4 billion dollars to resolve claims that JP Morgan misled Fannie Mae and Freddie Mac about the quality of mortgage-backed securities it sold them between 2005 and 2007, the FHFA, which oversees Fannie Mae and Freddie Mac, said in a statement.
The deal also includes 1.1 billion dollars to settle claims that JP Morgan sold risky home loans to the two mortgage giants between 2000 and 2008.
The settlement "provides greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers," said the FHFA's Acting Director Edward DeMarco.
The two mortgage giants have received about 190 billion dollars in aid from the U.S. government since they were under conservatorship after the 2008 financial crisis. Now they have benefited greatly from a U.S. housing recovery and repaid 146 billion dollars.
In addition to the settlement with the FHFA, JP Morgan is still in talks with other federal and state authorities over mortgage-related claims and probes.
"Today' s settlements totaling 5.1 billion dollars are an important step towards a broader resolution of the firm's MBS-related matters with government entities," the bank said in a statement.
