JP Morgan Chase Agrees to $13 Billion Settlement

Chase

In the article published November 8, 2013, I wrote JPMorgan Chase had tentatively agreed to pay another fine. In that tentative settlement Chase was mulling over paying out $13 billion, with most of that going towards relief from many state and federal lawsuits and investigations. There was also a $4 billion amount that would be put aside for payment to consumers.

Yesterday, November 20th, Chase agreed to pay that $13 billion, along with a payment to investors of more than $6 billion and the previously agreed upon $4 billion payment for consumer relief.

The settlement does not absolve Chase or its employees from facing possible criminal charges in the future. United States officials can still pursue charges against some of the individual employees who were involved in mortgage fraud.

On the lighter side, $7 billion of the compensatory payments will be tax-deductible for the banking giant. The $2 billion penalty will not be deductible.

Part of the $4 billion set aside for consumers would go toward helping some homeowners whose mortgages are handled by JPMorgan Chase. In another uncommon move, another share of the $4 billion will be used to reduce blight in neighborhoods that have been run down due, mostly to abandoned homes. (It’s not clear whether these neighborhoods hold homes owned by Chase.)

In a separate statement late yesterday, HUD Secretary Shaun Donovan said “The $4 billion in relief for homeowners and borrowers could benefit more than 100,000 borrowers. The goal is to help American consumers and communities hardest hit by the housing crisis.”

This settlement also requires JPMorgan Chase to hire an independent auditor to make sure they follow all the guidelines set out for them. Chase announced they expect to fulfill all the obligations in the settlement by the end of the year, 2017, giving them a little over four years to do so.

This settlement began from alleged bad behavior relating to mortgages and mortgage-backed bonds. Chase, and the banks they bought, securitized billions of dollars of defective mortgages. Two investors – Fannie Mae and Freddie Mac suffered huge losses by buying the residential mortgage-backed securities from Chase, Washington Mutual and Bear Stearns.

Chase also remains in the bulls-eye for several additional legal actions. The Attorney General in Sacramento, California is currently investigating JPMorgan Chase, as well as several European banks.

Chase issued a statement saying they have reserves to cover the settlement requirements and said they are cooperating with an ongoing criminal investigation. JPMorgan Chief Financial Officer Marianne Lake added “While we appreciate that the amounts in these settlements are significant, the bank has set far more money than $13 billion aside to deal with the fallout from the crisis.” Lake also clarified the ongoing criminal investigation into both the bank and employees.

JPMorgan Chase Chairman, Jamie Dimon also issued a statement, “despite the bank agreeing to the settlement, we did not admit to a violation of law.”

Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
 estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes: foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure
defense legal assistance. He also handles bankruptcies, wrongful credit reporting, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant.
 If you think you will be
facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your
 situation and go over all your options with you.

About theglawfirm1

Gantenbein Law Firm is a Denver, Colorado Tax Law Firm, servicing all of Colorado. Gantenbein Law Firm also specializes in Colorado Real Estate Law, Colorado Foreclosure Defense, Wills & Trusts, and Business Law.
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