jpmorganchase

 

A settlement has finally been reached between the nations largest bank and the U.S. Department of Justice. After months of investigation into the seedy dealings of toxic loans, J. P. Morgan Chase admits that their practices were unlawful and plans to fork over $13 billion. Of the settlement, $4 billion will aid in the relief of suffering homeowners.

 

“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric Holder said in a statement. “J.P. Morgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.”

 

In an official statement, the Dept. of Justice says that J. P. Morgan Chase acknowledged the fact that it told investors that mortgage securities were in compliance with underwriting policies, when in fact bank employees knew that the loans did not comply. Therefore, the $4 billion in aid and its particulars were decided upon by the Dept of Justice and the Dept. of Housing and Urban Development. Their negotiations ended with the following distributed payout:

 

  • $3.2 billion towards the write-down of principle amounts of J.P. Morgan Chase held loans.
  • Up to $500 million towards mortgage “forbearance” – the restructuring of home loans in order to reduce monthly payments.
  • Additional $2 billion will go toward “new mortgage origination for low-and-moderate income borrowers and absorb the remaining principle owed on properties that have been vacated, but not yet foreclosed upon.” 

 

It is expected that these mortgage fixes will be completed by the end of 2016.

 

Read full story HERE.