JPMorgan Urged to Pay More in Mortgage Deal

September 27, 2013
New York Times DealBook Blog  
mortgage lending news

As the Justice Department nears a multibillion-dollar settlement with JPMorgan Chase over the bank's sketchy mortgage practices, JPMorgan CEO Jamie Dimon met with Attorney General Eric Holder to discuss the deal. JPMorgan has offered to pay a fine of about $7 billion and provide $4 billion in relief for struggling homeowners, but the Justice Department would like the bank to pony up a greater amount in penalties. The settlement discussions may be approaching the final stages; but since terms have not been met, discussions may still unravel.

Rather than the size of the fine, the bank is primarily concerned about using the settlement to resolve many of the mortgage-related investigations it faces, such as a criminal investigation in California of the bank’s mortgage practices. Under the current settlement boundaries, the Justice Department also will not include an investigation from the U.S. attorney’s office in Manhattan. JPMorgan is in advanced stages of negotiating that deal, which involves violations of the rules of the Federal Housing Administration’s mortgage insurance program. A deal with the Justice Department could force JPMorgan to pay hundreds of millions of dollars to settle a lawsuit filed by New York Attorney General Eric Schneiderman and close an investigation in Pennsylvania, both of which involve mortgages from companies the bank bought in 2008.

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