JP Morgan $13 Billion Settlement for Bad Mortgage Practices
October 31, 2013 By Elliot S. Schlissel
For months now, JP Morgan Chase and the Justice Department have been in negotiations with regard to a settlement resolving federal allegations concerning the bank’s sale of faulty mortgage securities. The Justice Department’s position is the sale of these faulty mortgage securities was a major factor in the mortgage/real estate crisis in America. The $13 Billion penalty would be the largest penalty ever paid by a single institution. The Justice Department has been investigating JP Morgan Chase for many months with regard to its activities concerning mortgage backed securities. In the event this settlement is entered into, it would be a major win for the Justice Department. JP Morgan Chase is the largest bank in the country. This settlement will not stop the federal government from bringing criminal charges against JP Morgan Chase. However, the deal would end a New York State lawsuit brought by Attorney General Eric T. Schneiderman and an investigation in the State of California.
HSBC and Barclay’s Bank Fined Also
Attorney General Holder has in the past levied multimillion dollar fines against other large financial institutions which includes both HSBC and Barclay’s Bank.
JP Morgan seeks to resolve this investigation regarding its conduct in recent years. As a result of this investigation, the bank’s first quarter report showed a loss. This was the first quarterly loss for JP Morgan Chase in ten years. The bank’s Chief Executive Officer, Jamie Dimon, seeks to resolve these investigations into the bank’s conduct. With this in mind, he is taking a conciliatory approach in his dealings with regulators. He has stated that the problems JP Morgan is facing are “painful.”
In 2011, JP Morgan Chase was one of the eighteen banks sued by the Federal Housing Finance Agency. That suit was to recoup losses sustained by Fannie Mae and Freddie Mac with regard to bundled securities that were improperly underwritten as home loans.
Elliot Schlissel is foreclosure defense lawyer. Elliot and his associates litigate foreclosure lawsuits and they help their clients obtain mortgage modifications. Elliot and his aggressive associates work hard to keep their clients living in their homes.
