Claims about misleading mortgage securities puts JPMorgan out billions
9:12 PM, Oct 25, 2013
JPMorgan Chase has agreed to pay $5.1 billion to resolve claims that it misled Fannie Mae and Freddie Mac about risky mortgage securities it sold them before the housing market collapsed.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with JPMorgan, the largest U.S. bank. A broader deal with the Justice Department is still being negotiated.
JPMorgan sold tens of billions in mortgage securities to Fannie and Freddie, according to the agency. The securities soured after the housing bubble burst in 2007, losing billions in value.
The government rescued Fannie and Freddie during the financial crisis when both were on the verge of collapse. The companies received taxpayer aid totaling $187 billion. They have since become profitable and repaid $146 billion.