Whomever writes the checks at JPMorgan Chase must be getting hand cramps by now. On Friday, the nation's biggest bank agreed to pay $4.5bn to settle investors' claims that it sold them shoddy mortgages.
That's in addition to the $13bn JPMorgan has tentatively agreed to pay in a settlement with the Justice Department, also related to the bank's mortgage sales practices.
The Friday settlement was with a group of 21 institutional investors, according to a New York Times report. The money will go to trustees that oversee more than 300 residential mortgage-backed securities trusts.
“This settlement is another important step in JPMorgan’s efforts to resolve legacy related (residential mortgage-backed securities) matters,” JPMorgan said in a news release. “The firm believes it is appropriately reserved for this and any remaining R.M.B.S. litigation matters.”
According to the Times, Friday's deal concerns mortgage-backed securities sold by JPMorgan between 2005 and 2008, along with mortgage bonds sold by Bear Stearns, which JPMorgan bought during the financial crisis. The same group earlier reached an $8.5bn settlement with Bank of America, the Times reported.
Friday's settlement hardly spells the end of JPMorgan's legal troubles. The lending giant still faces numerous lawsuits -- including pending litigation over $100bn worth of residential mortgage-backed securities, according to the Times. The bank has set aside $23bn as a hedge against expected litigation costs.