Trustees extend deadline for $4.5 bln JPMorgan mortgage settlement

NEW YORK Wed Jan 22, 2014 6:34pm EST

NEW YORK Jan 22 (Reuters) - Trustees extended by two months the deadline for them to decide whether to accept JPMorgan Chase and Co's proposed $4.5 billion settlement with investors who lost money on mortgage-backed securities.

In a notice dated Jan. 17, seven trustees overseeing the securities said they had opted to extend a Jan. 15 deadline to accept the offer. The notice, posted on a website run by the trustees, said none of the trustees had made a determination "regarding the reasonableness of, or the advisability of, entering into the proposed settlement agreement."

The agreement with 21 institutional investors in 330 residential mortgage-backed securities trusts gave the trustees 60 days to accept the deal, with a right to extend it for another 60 days.

JPMorgan Chase made the offer in November as it sought to get past problems related to mortgage-backed securities issued before the 2008 financial crisis by the bank and Bear Stearns, which it bought during the crisis. At the same time, it was also finalizing a separate $13 billion settlement with the U.S. government over bad mortgages.

JPMorgan spokesman Brian Marchiony declined to make an immediate comment on the extension.

Kathy Patrick, a lawyer for the institutional investors, declined to comment.

The institutional investors include BlackRock Inc, Goldman Sachs & Co, and Bayerische Landesbank.

Separately, on Wednesday Fir Tree Partners, a private investment firm, made a tender offer for two of the mortgage-backed securities trusts subject to the settlement.

"Holders will get their money now rather than waiting for the settlement payout, which could potentially take months or years, if it happens at all," Clinton Biondo, a managing director at Fir Tree Partners, said in a statement.

A similar settlement was reached in 2011 between investors in mortgage-backed securities issued by Countrywide Financial and Bank of America Corp, which bought Countrywide in 2008.

That settlement, for $8.5 billion, is awaiting approval by a New York state judge, Justice Barbara Kapnick.

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