Settlement reached: JP Morgan pays $4.5 billion
Mortgage-backed securities were created by investment banks that were meant to be risk-free home loans.
NEW YORK CITY:
US investment bank JP Morgan Chase said it had reached a deal with 21 institutional investors, including BlackRock and Goldman Sachs Asset Management, to pay $4.5 billion to settle the case of losses on mortgage securities sold before the financial crisis. The case helps JP Morgan settle a major dispute regarding the mortgage litigation relating to the financial crisis of 2007. The mortgage securities were issued between 2005 and 2008 by JP Morgan and Bear Stearns, a bank it acquired during the financial crisis. JP Morgan said that the deal would settle investor’s claims that the bank had misrepresented the asset quality of 330 residential mortgage-backed securities the investors were sold. Mortgage-backed securities were created by investment banks that were meant to be risk-free home loans.
Published in The Express Tribune, November 17th, 2013.
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