CORRECTED-UPDATE 1-JPMorgan Chase agrees to pay $4.5 bln on mortgage security claims
(Corrects dateline to Nov. 15)
By Karen Freifeld
NEW YORK Nov 15 (Reuters) - JPMorgan Chase & Co said on Friday it has agreed to pay $4.5 billion to settle claims by investors who lost money on mortgage-backed securities before the collapse of the U.S. housing market.
The bank reached the agreement with 21 institutional investors in 330 residential mortgage-backed securities trusts issued by JPMorgan and Bear Stearns, which it took over during the financial crisis, according to the bank and lawyers for the investors.
The deal still has to be accepted by trustees for the trusts holding the securities, the parties said.
The settlement does not include trusts issued by Washington Mutual, which JPMorgan also acquired.
The deal is separate from the preliminary $13 billion settlemnet JPMorgan has reached with the U.S. government that would resolve a raft of actions over mortgage-backed securities.
"This settlement is another imoprtant step in J.P. Morgan's efforts to resolve legacy related RMBS matters," the bank said in a statement.
Under the agreement, trustees have until Jan. 15 to accept the offer, which may be extended for another 60 days, according to Gibbs & Bruns, the Houston law firm that represented the institutional investors.
The 21 investors include BlackRock Inc, Metlife Inc, Allianz SE's Pacific Investment Management Company, th e TCW Group and Bayerische Landesbank.
If accepted, the deal would resolve claims that JPMorgan and Bear Stearns misrepresented the mortgages underlying the securities, JPMorgan said. It would also resolve servicing claims on all trusts issued by the bank and Bear Stearns between 2005 and 2008. (Reporting by Karen Freifeld; Editing by Gary Hill and David Gregorio)
- iPhone comes out of a 'bygone era', reviewers hail bigger handset
- Boeing, SpaceX win contracts to build 'space taxis' for NASA
- Polls show Scottish opponents of independence with slight lead ahead of vote |
- Fed could hint on rate-hike plans as it prepares for policy turn
- Wildfire rips through 150 homes in Northern California