JPMorgan Chase & Co has reportedly reached a tentative $13 billion deal with the U.S. Department of Justice that would settle federal investigations into mortgage loans the bank sold to investors leading up to the Great Recession, according to a source cited by Reuters.
The banking titan is still subject to criminal liability for some of the mortgages that were packaged into bonds and then sold to investors, says the source, and the potential settlement agreement includes JPMorgan’s “likely” cooperation with criminal inquiries into individuals involved in the questionable conduct.
Neither JPMorgan nor Justice Department officials provided comment to Reuters on the tentative deal, which the unnamed source announced on Saturday.
“The record settlement could help resolve many of the legal troubles the New York bank is facing,” Reuters reports. “Earlier this month JPMorgan disclosed it had stockpiled $23 billion in reserves for settlements and other legal expenses to help cover the myriad investigations into its conduct before and after the financial crisis.”
Senior officials at the Justice Department and JPMorgan spoke on Friday to finalize the agreements “broad outlines,” according to one of Reuters’ sources with knowledge of the deal.
“The broader settlement is a product of a government working group created nearly two years ago to investigate misconduct in the residential mortgage-backed securities market that contributed to the financial crisis,” says the article.
Written by Alyssa Gerace