It's not quite $13 billion yet but JPMorgan Chase and the US government are slowly getting there.
The nation's biggest bank has reportedly agreed to shell out $4 billion for customers negatively affected by its bad mortgage behavior.
That comes after weeks of negotiation with the US Department of Justice which has been playing hardball with the bank over the amount it wants it to pay over the matter.
The $4 billion would go toward write-downs of mortgage loans in which the property is worth less than what borrowers owe. Some of the money would also go toward restructuring mortgages so that monthly payments would be reduced, according to the WSJ which cites a source familiar with the matter.
Another $2 billionwill be used for "new originations for low- and moderate-income borrowers or absorbing the remaining principal owed on properties that have been vacated but not yet foreclosed upon," the report notes.
For weeks now JPM has been in the spotlight for the plethora of legal battles its been engaged in. Its negotiations with the DOJ is by the far the most significant as the total amount paid by the bank could total $13 billion, including the reported $4 billion reported today.
The $13 billion would be the largest amount paid by a single company to the DOJ.
On Friday, in a separate settlement, JPM announced a $4.5 billion agreement with 21 institutional investors to make a binding offer to the trustees of 330 residential mortgage-backed securities issued by the bank and Bear Stearns. Goldman Sachs Asset Management, BlackRock Financial Management and Western Asset Management Company were among the investors.
In late October, Jamie Dimon's bank said it would pay $5.1 billion to Fannie Mae and Freddie Mac's regulator, the Federal Housing Finance Agency (FHFA), over soured mortgage securties it sold to the agencies in 2000 to 2008.
“Today’s settlements totaling $5.1 billion are an important step towards a broader resolution of the firm’s MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies,” the bank said in a statement following that settlement.
The remainder of the $13 billion is expected to be announced later this week.
Shares of JPM were up 1.6% today.
