JPMorgan Chase Eyes Record Settlement
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Peter Foley/Bloomberg via Getty Images(NEW YORK) — The massive fallout from the bursting of the housing bubble more than five years ago continues to rumble through the banking system.
JPMorgan Chase is in talks to make the largest-ever payment in the history of financial regulation to settle government investigations into its sales of mortgage-backed securities in the years leading up to the financial crisis. The bonds tanked after the housing bubble burst, and the bank has resisted admitting guilt.
Published reports say the huge deal would involve $7 billion in cash to the government and $4 billion in consumer relief for struggling homeowners. The agreement, which could be signed within days, involves multiple government agencies.
The $11 billion payment would be far higher than the initial amount the bank offered to pay the government earlier this week. And it also would be more than double the previous record when BP paid out $4.5 billion following criminal charges related to the Gulf of Mexico oil spill.
When he sued JPMorgan Chase last year, New York Attorney General Eric Schneiderman said the bank had committed “multiple fraudulent and deceptive acts” as it sold mortgage backed securities.
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