JPMorgan to pay $18.3 million to settle mortgage lawsuit
By Nate Raymond
(Reuters) - JPMorgan Chase & Co (JPM.N: Quote) has agreed to pay $18.3 million to settle claims that documents for mortgages acquired by a unit of Bear Stearns Cos failed to disclose material information about interest rates.
The settlement, disclosed in court papers filed on Friday in U.S. District Court in Los Angles, is one of several class actions JPMorgan has agreed to resolve related to option adjustable rate mortgages.
Filed in 2007, the lawsuit alleged that JPMorgan and units of Bear Stearns failed to make proper disclosures related to the resetting of introductory interest rates.
The lawsuit alleged the mortgage documents misleadingly failed to disclose that the loan's principal balance would increase if a borrower made the minimum monthly payment.
The loans were acquired by EMC Mortgage Corp, the lending unit of Bear Stearns, which JPMorgan took over amid the U.S. economic meltdown in 2008.
Following several years of litigation, U.S. District Judge James Otero certified in September 2012 a class of people who from August 2003 to March 2013 had option adjustable rate mortgages purchased by EMC secured by property in California.
JPMorgan continues as part of the settlement to deny wrongdoing. A spokeswoman for JPMorgan declined comment.
"I'm happy with the settlement, and I think given the risk to reward, people are going to be pleased," said Jeffrey Berns, a lawyer for the plaintiffs at Berns Weiss. Continued...