JPMorgan details global settlement; a few risks remain

|About: JPMorgan Chase & Co. (JPM)|By:, SA News Editor

The $13B deal settles civil charges with the DOJ, States Attorneys General from NY, CA, IL, MA, and DE, the FHFA, the FDIC, and the NCUA.

$9B of the deal is cash, and includes a $2B fine, $4B in compensation to the FHFA for "alleged" losses relating to private-label RMBS, and $3B in other compensation to the FDIC, NCUA, and State AGs. The other $4B of the settlement will be mostly from mortgage modifications and targeted (low-income) origination programs.

Remaining mortgage-related risks to the bank are suits by the monolines (MBIA, Assured, Ambac), additional class-action and direct purchaser litigation, and mortgage claims relating to disputed insurance on FHA loans.

Presentation slides

Statement Of Facts agreed to by JPMorgan

The settlement - including the $4B of mortgage mods and origination programs - will come out of legal reserves and thus won't require a charge against earnings.

Responding to a question on the conference call, CFO Marianne Lake says there is nothing preventing another State AG from bringing action, though she doesn't expect it.

JPM closed three-quarters of a percent higher today, just a few cents off a multi-year high. The shares are down marginally in after hours trade.

See also: JPM's $4.5B private MBS settlement last week.