JPMorgan announces $5.1B in settlements with FHFA

October 25, 2013

The Federal Housing Finance Agency, as conservator of Fannie Mae (FNMA) and Freddie Mac (FMCC), announced it has reached a settlement with J.P. Morgan Chase (JPM) and related companies for $4B to address claims of alleged violations of federal and state securities laws in connection with private-label, residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac. Under the terms of the agreement, J.P. Morgan Chase will pay approximately $2.74B to Freddie Mac and $1.26B to Fannie Mae to resolve certain claims related to securities sold to the companies between 2005-2007 by J.P. Morgan Chase, Bear Stearns, and Washington Mutual. In separate settlements, J.P. Morgan Chase resolved representation and warranty claims with Fannie Mae and Freddie Mac related to single-family mortgage purchases by the two companies. Under the terms of the agreements, J.P. Morgan Chase Bank will pay a total of approximately $1.1B: $670M to Fannie Mae and $480M to Freddie Mac.