JPMorgan settlement over mortgage-bonds rejected by DoJ

Jamie Dimon

JPMorgan’s proposed terms to settle state and federal probes of the bank’s mortgage-bond sales were rejected by the Department of Justice this week, said two people familiar with the negotiations.

Bloomberg reports that the Justice Department told JPMorgan it won’t agree to language the firm submitted October 27, said the people, who asked not to be named because the talks are private.

The government would bar JPMorgan from trying to recover part of the costs from the Federal Deposit Insurance Corp. and opposed the company’s bid to avoid criminal liability in cases that don’t involve residential mortgage-backed securities, one person said.

JPMorgan, led by CEO Jamie Dimon, is trying to complete a $13bn settlement outlined in talks earlier this month. Part of the deal was finished with the Federal Housing Finance Agency last week, as the New York-based bank agreed to pay $4bn to settle claims it sold faulty mortgage bonds to Fannie Mae and Freddie Mac.

The Justice Department and JPMorgan, also differ on whether to include an additional $1.1bn payment in the FHFA pact as part of the total settlement, one person said.

To access the complete Bloomberg article hit the link below

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