JPMorgan reaches $13 billion tentative deal with Justice Department

Source: CNBC

Published: Saturday, 19 Oct 2013 | 2:30 PM ET

JPMorgan Chase reached a $13 billion tentative deal Friday with the Justice Department, said a person familiar with the negotiations.

The deal settles probes of its residential mortgage-backed securities business. However, it does not release the bank from potential criminal charges, a source said.

Attorney General Eric Holder and JPMorgan CEO Jamie Dimon, along with two lawyers, struck the deal Friday after the market close.

This week, JPMorgan Chase also reached a tentative $4 billion deal with the U.S. Federal Housing Finance Agency. The deal settles claims that the bank misled government-sponsored mortgage agencies, Fannie Mae and Freddie Mac, about the quality of mortgages it sold them during the housing boom, according to a person familiar with the matter.




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JPMorgan Said to Have Reached $13 Billion U.S. Mortgage Deal
Tom SchoenbergOct 19, 2013 3:09 pm ET
(Updates with settlement talks in second paragraph.)

Oct. 19 (Bloomberg) -- JPMorgan Chase & Co. has reached a tentative resolution of all civil mortgage-bond related matters with the U.S. Department of Justice, a person familiar with settlement negotiations said.

The settlement amount, which increased from $11 billion to $13 billion during negotiations last night, the person said, includes a $4 billion accord with the Federal Housing Finance Agency over the bank’s sale of mortgage-backed securities.

The pact, which isn’t yet final, doesn’t include a release of potential criminal liability, the person said, at the insistence of U.S. Attorney General Eric Holder, who told JPMorgan Chairman Jamie Dimon during talks that such a release wouldn’t be forthcoming as part of any deal.

The proposed accord will probably require the bank to cooperate in criminal investigations of individuals tied to wrongdoing associated with the bank’s mortgage practices, said the person, who requested anonymity because the matter isn’t public. The deal also includes pending investigations by New York Attorney General Eric Schneiderman, the person said.

JPMorgan is the target of investigations in the U.S. and abroad, including probes of its hiring practices in Asia. The bank has tapped $8 billion of $28 billion in reserves set aside since 2010 to cover its legal costs.

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