Tags: FHFA | Billion | JPMorgan | Loans

FHFA Said to Seek $6 Billion from JPMorgan on Bad Loans

Tuesday, 27 Aug 2013 05:21 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
A U.S. housing regulator is seeking at least $6 billion from JPMorgan Chase & Co. to settle civil claims the bank sold bad mortgage bonds to government-backed finance companies Fannie Mae and Freddie Mac, according to a person briefed on the matter.

JPMorgan, the biggest U.S. bank by assets, is fighting the Federal Housing Finance Agency’s latest request, said the person, who asked not to be identified because the talks are private. The lawsuit is scheduled to go to trial next June, according to a filing in federal court in Manhattan.

The FHFA sued JPMorgan and 17 other banks over faulty mortgage bonds two years ago in an effort to recoup some of the losses taxpayers were forced to cover when the government took over the failing mortgage finance companies in 2008. Fannie Mae and Freddie Mac, which are regulated by FHFA, have taken $187.5 billion in federal aid since then.

Peter Garuccio, a spokesman for FHFA, and Justin Perras, a spokesman for the bank, declined to comment. The Financial Times reported the $6 billion minimum settlement request earlier Tuesday.

False Statements

The FHFA accused JPMorgan and its affiliates of making false statements and omitting material facts in selling $33 billion in mortgage bonds to Fannie Mae and Freddie Mac from Sept. 7, 2005 through Sept. 19, 2007. The regulator said executives at JPMorgan, Washington Mutual and Bear Stearns Cos., which were acquired by JPMorgan in 2008, knowingly misrepresented the quality of the loans underlying the bonds, among other things, according to the lawsuit.

UBS AG, Switzerland’s largest bank, agreed to pay $885 million last month to settle claims it misrepresented the quality of the loans backing $4.5 billion in residential mortgage bonds sponsored by UBS and $1.8 billion of third-party mortgage bonds sold to Fannie Mae and Freddie Mac.

UBS was the third bank to reach an agreement with FHFA. Citigroup Inc. and General Electric Co. both paid undisclosed amounts to settle the regulator’s claims.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved