(Corrects dateline to Nov. 15)
By Karen Freifeld
NEW YORK Nov 15 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
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
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