Chase breaks out the checkbook for another mortgage settlement

by Ryan Smith06 Feb 2014
Whoever makes out the checks at JPMorgan Chase must be getting writer’s cramp by now. The bank has agreed to pay the U.S. government $614 million in order settle the latest in a never-ending parade of lawsuits related to its handling of mortgage loans.

As part of the settlement, the nation’s largest lender also admitted that over the course of more than a decade, it had approved thousands of insured loans that weren’t eligible for insurance by the Department of Veterans Affairs or the Federal Housing Administration’s Department of Housing and Urban Development.

“When those loans ultimately defaulted, HUD-FHA and the VA suffered substantial losses that, but for JPMORGAN CHASE’s conduct, would not have occurred,” the Justice Department said in court filings.

“For years, JPMorgan Chase has enjoyed the privilege of participating in federally-subsidized programs aimed at helping millions of Americans realize the dream of homeownership. Yet, for more than a decade, it abused that privilege,” said U.S. Attorney Preet Bharara. “JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the Government of known problems with those loans, and leaving the Government to cover the losses when the loans defaulted. With today’s settlement, however, JPMorgan Chase has accepted responsibility for its misconduct and has committed to reform its business practices.”

As part of the settlement, JPMorgan must implement a quality control program “to address the misconduct concerning the integrity of loan data submitted to HUD-FHA,” according to the Justice Department.