Junk mortgages: JPMorgan to pay $5.1b settlement
FHFA accuses the bank, and two subsidiaries, of causing billions of dollars in losses to Freddie Mac and Fannie Mae.
NEW YORK:
US officials on Friday said that JPMorgan Chase will pay $5.1 billion to settle charges it overstated the quality of mortgage-backed securities sold to Freddie Mac and Fannie Mae. The Federal Housing Finance Agency (FHFA), which regulates the two government-backed financing giants, had accused the bank, and two subsidiaries, Bear Stearns and Washington Mutual, of causing billions of dollars in losses to the two mortgage finance companies. According to the FHFA’s 2011 complaint, the larger ($4.0 billion) of the two settlements relates to $33.8 billion in residential mortgage-backed securities sold by JPMorgan to Fannie and Freddie between 2005- 2007. Acting Director FHFA, Edward De Marco said that the settlements provided greater certainty in the marketplace and is in line with their responsibility for preserving and conserving Fannie Mae’s and Freddie Mac’s assets on behalf of taxpayers.
Published in The Express Tribune, October 27th, 2013.
US officials on Friday said that JPMorgan Chase will pay $5.1 billion to settle charges it overstated the quality of mortgage-backed securities sold to Freddie Mac and Fannie Mae. The Federal Housing Finance Agency (FHFA), which regulates the two government-backed financing giants, had accused the bank, and two subsidiaries, Bear Stearns and Washington Mutual, of causing billions of dollars in losses to the two mortgage finance companies. According to the FHFA’s 2011 complaint, the larger ($4.0 billion) of the two settlements relates to $33.8 billion in residential mortgage-backed securities sold by JPMorgan to Fannie and Freddie between 2005- 2007. Acting Director FHFA, Edward De Marco said that the settlements provided greater certainty in the marketplace and is in line with their responsibility for preserving and conserving Fannie Mae’s and Freddie Mac’s assets on behalf of taxpayers.
Published in The Express Tribune, October 27th, 2013.