JPMorgan in talks to settle mortgage probes: source

Tue Sep 24, 2013 6:48pm EDT
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By Aruna Viswanatha, Emily Flitter and David Henry

NEW YORK (Reuters) - JPMorgan Chase & Co, facing several investigations into its mortgage practices, is seeking a global settlement with U.S. government authorities in multiple jurisdictions, a person familiar with the matter said on Tuesday.

Negotiations have resumed with the U.S. Department of Justice after federal prosecutors in California delayed a plan to file a lawsuit there on Tuesday.

The global settlement would cover probes of JPMorgan's mortgage business, as well as investigations of similar operations it inherited from other banks during the financial crisis. The investigations include civil and criminal authorities from the DOJ.

The California case involved the sale of bonds backed by subprime mortgages and other risky home loans between 2005 and 2007.

The California negotiations initially broke down over the amount the bank would pay as a penalty, sources said.

Meanwhile, the Department of Housing and Urban Development took issue on Tuesday with a report in another publication that the agency was seeking a $20 billion settlement from the bank over its mortgage practices. The housing agency said that was "categorically false."

"The department takes the allegations against JPMorgan Chase seriously and has been involved in multi-party negotiations to reach a settlement. However, no one at this agency - including the secretary - ever floated a $20 billion settlement figure," HUD general counsel Helen Kanovsky said.

The planned California litigation did not involve HUD, and that agency's involvement in the talks suggest that both the bank and the government want to resolve multiple investigations in a larger settlement, according to people familiar with the matter.   Continued...