Seeking Alpha

JPMorgan details global settlement; a few risks remain

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.

From other sites
Comments (8)
  • thotdoc
    , contributor
    Comments (1940) | Send Message
    Oh yeah! We had 13 Billion dollars in the legal reserve fund because we are upstanding citizens. And, yuck, yuck…it really won't hurt us, because we are the best and the brightest and we are doing God's work.
    19 Nov 2013, 05:15 PM Reply Like
  • philipmax
    , contributor
    Comments (371) | Send Message
    And another blogger is soon expected here, to cry over the trials and tribulations of this dear beloved bask that is hounded by blood sucking government.
    Let's understand this. This bank nearly got away with murder. As it is, it is getting away with manslaughter. JPM benefited more than anyone else with this settlement. What is most galling is that the majority of the money goes to government coffers instead of to the investors who lost their money.
    19 Nov 2013, 06:43 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (10239) | Send Message
    Next up...settling with the monolines!
    19 Nov 2013, 06:50 PM Reply Like
  • Jason B
    , contributor
    Comments (450) | Send Message
    I find you posters creepy how you take the sheep-line from the Mafioso USG.


    I wonder how you would react if the USG forced you to buy a house, then after you bought the house you were prosecuted because it was a drug den.


    Very creepy indeed.
    19 Nov 2013, 09:53 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (10239) | Send Message
    Every politician in D.C. was put there by either you or your neighbors.


    If you have a problem with the bs in D.C. then you need to take a look around you.
    20 Nov 2013, 04:10 PM Reply Like
  • k2caliguy
    , contributor
    Comments (67) | Send Message
    This is government propaganda and strong arming. One one hand the government is doing everything it can to drop interest rates and mortgage rates to increase employment, then on the other it assigns blame to a whole process that the government did not care to regulate at all , and it still can't figure out how to apply Frank-Dodd nor apply global international accounting rules to American economy but it can come back and take 13 billion like it has really done something for the American people. how many american ares still left in a house that are underwater? It was cheaper to walk away... Obama needs to has department check these types of behaviors and focus on better underwriting practices. This is not a solution the mortgage industry....
    19 Nov 2013, 10:23 PM Reply Like
  • SoCalNative
    , contributor
    Comments (630) | Send Message
    Pffft. Pa-leaze. Everyone hates a winner. Especially the dreamers as opposed to the investors who have done quite well by Dimon. Get over it.
    20 Nov 2013, 01:17 AM Reply Like
  • philipmax
    , contributor
    Comments (371) | Send Message
    Interesting news at today's NY Times Financial page. JPM got away with paying 2.5% of damages it caused with the Mortgage fiasco. I've been claiming this for a number of years. JPM does not make a deal that hurts itself. It only makes deals that add and accrue to itself. In this case, it was protection money that allows it to keep the other 97.5%. Will there be criminal indictments? I'd take a bet that only one or two unlucky underlings will ever be charged, if, anyone is charged at all.
    So, all-in-all JPM stays on top, and the moral turpitude of TBTF continues....
    20 Nov 2013, 08:31 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs