Mega bank JPMorgan Chase (JPM) signed an agreement with government agencies to end all existing legacy mortgage-backed securities issues for $13 billion.
New York Attorney General Eric Shneiderman, who co-chairs a working group overseeing legacy mortgage investigations, announced the deal, calling it the largest settlement with a single entity in American history.
Schneiderman chairs the RMBS working group, which has spent the past year investigating RMBS issues on behalf of state and federal regulators. The bank reached the deal with the RMBS Working Group, the Department of Justice, and countless other agencies.
The settlement reportedly resolves federal and civil claims related to the bank’s packaging, marketing, sale and issuance of mortgage-backed securities prior to the housing downturn. It also covers legacy issues left over from Bear Stearns and Washington Mutual, two entities JPM took over in the wake of the financial meltdown.
As part of the final agreement, JPMorgan will pay $9 billion, while also providing $4 billion in consumer relief in the form of loan modifications for borrowers at risk of foreclosure.
New York state alone will receive $1 billion from the settlement, including $613 million in cash and another $400 million in consumer relief for struggling borrowers in the state.
Some of the aid will fund families impacted by Superstorm Sandy, with the rest going to legal services and counseling for distressed New York homeowners.
The RMBS Working Group that Schneiderman co-chairs helped usher in the deal. The organization is a joint state and federal effort launched back in 2012 to engage several agencies in the fight against legacy RMBS issues. Those entities include the Department of Justice and various federal and state law enforcement groups.
“Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman in a statement. “This historic deal, which will bring long-overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do.”
Just back out of hospital in early March for home recovery. Therapist coming today.
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