And it's the last thing this firm needs right now.
Bloomberg News reports that a U.S. housing regulator is seeking at least $6bn from JP Morgan to settle civil claims the bank sold bad mortgage bonds to government-backed finance companies Fannie Mae and Freddie Mac, according to a person briefed on the matter.
JP Morgan is fighting the Federal Housing Finance Agency’s latest request, said the person, who asked not to be identified because the talks are private. The lawsuit is scheduled to go to trial in June, according to a filing in federal court in Manhattan.
The FHFA sued JPMorgan and 17 other banks over faulty mortgage bonds two years ago in an effort to recoup some of the losses taxpayers were forced to cover when the government took over the failing mortgage finance companies in 2008. Fannie Mae and Freddie Mac, which are regulated by FHFA, have taken $187.5bn in federal aid since then.
Peter Garuccio, a spokesman for FHFA, and Justin Perras, a spokesman for the bank, declined to comment.
The Financial Times reported the $6bn minimum settlement request earlier Wednesday.
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