NEW YORK Nov 18 JPMorgan Chase & Co and
U.S. government officials have agreed on terms of a $4 billion
consumer relief package that is to be part of a $13 billion deal
to settle the bank's liability to government agencies over
mortgage securities, according to a person familiar with the
The $4 billion portion of the deal would pay for write-downs
of mortgage loans, demolition in blighted areas and lower
monthly payments for homeowners, the person said on Monday.
Shaun Donovan, secretary of the U.S. Department of Housing
and Urban Development, was involved with the negotiations which
have come under the umbrella of a broader settlement between the
bank and the U.S. Department of Justice, the person said.
Of the $4 billion, about $1.5 billion is to be earmarked for
write-downs of loans that exceed the property value and as much
as $500 million more would go for restructuring loans to lower
monthly payments. The remaining $2 billion would go for assorted
measures, including new loans for low- and moderate-income
borrowers in areas that have been hard-hit by the housing crisis
and demolition of abandoned homes, the person said.
The agreement is to require JPMorgan to spend the money by
the end of 2016 under the watch of a independent monitor, the
The final $13 billion deal is likely to be announced on
Tuesday, the person said. Another source
familiar with the matter said earlier in the day that that
announcement could be in the next day or two. Both sources were
not authorized to speak on the record about the matter.
The total deal is also to include a $2 billion penalty and
at least $4 billion for federal housing finance agencies under a
previously announced agreement.
The fact that the $13 billion deal would include $4 billion
for some form of "consumer relief" has been known for weeks. The
details of how the $4 billion would be spent were reported
earlier on Monday by the Wall Street Journal.