JP Morgan agrees to pay $4.5bn in mortgage settlementNovember 16, 2013 - 14:48 AMT PanARMENIAN.Net - U.S. investment bank JP Morgan has agreed to pay $4.5bn to investors who lost money on mortgage-related securities during the financial crisis, BBC News reported. The settlement is with 21 major institutional investors. Mortgage-related investments were a major factor in the crisis, which began in 2007 with the collapse of the US housing market. Last month JP Morgan agreed a separate, preliminary $13bn deal with the U.S. government over mortgage securities. As part of that deal $5.1bn would go to settle charges that the bank misled mortgage giants Fannie Mae and Freddie Mac during the housing boom. That settlement was the biggest ever by a U.S. bank. Now, 21 institutional investors that put money into more than 300 residential mortgage-backed securities are to be reimbursed by the bank. The securities in question were issued between 2005 and 2008 by JP Morgan and Bear Stearns - a bank which it took over during the financial crisis. "This settlement is another important step in JP Morgan's efforts to resolve legacy related... matters" stemming from mortgage-related securities, JP Morgan spokeswoman Jennifer Zuccarelli said in a statement on Friday, Nov 15. Friday's deal still has to be accepted by trustees for the trusts that hold the securities. A final settlement with the U.S. Justice Department is expected to be announced soon. Mortgage-backed securities were sophisticated financial products created by many investment banks in the run-up to the financial crisis. These special bonds contained a mix of investments but at their heart were supposed to be risk-free home loans. When the housing bubble burst, the value of these assets fell sharply and the credit markets seized up. The balance sheets of many U.S. and European banks, including those in the UK, became toxic and they had to be bailed out by their governments. What JP Morgan is alleged to have done was sell the mortgage-backed assets knowing full well that many of the home loans were in fact very risky. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Scholz hopes Armenia-Azerbaijan peace treaty will be signed this year German Chancellor Olaf Scholz hopes that a peace treaty between Armenia and Azerbaijan will be signed this year. Ucom equips four bus stops in Ijevan with free Wi-Fi Ucom now provides free Wi-Fi coverage in smart bus stops in four communities of Ijevan. Armenians stage more campaigns against territorial concessions to Azerbaijan Protesters blocked more roads across Armenia on Friday, April 26 in continuing attempts to scuttle territorial concessions to Azerbaijan. Czech-Armenian military cooperation discussed in Yerevan A delegation led by the Director General for the Industrial Cooperation Division of the Ministry of Defence of the Czech Republic visited Armenia. |