Another Day, Another $4.5 Billion Check From JPMorgan


If anyone believed JPMorgan (NYSE:JPM) had untangled itself from the web of lawsuits, that person was mistaken. The nation’s largest bank announced a $4.5 billion settlement had been reached with investors over residential mortgage-backed securities sold to them by Bear Sterns, JPMorgan, and Chase Bank between 2005 and 2008. Pending litigation over Washington Mutual mortgage deals, as well as the $13 billion expected to be settled with the federal government, do not factor into this deal.

JPMorgan Chase detailed the settlement in a company statement Friday, November 15. Despite the 330 mortgage security trusts settled by the $4.5 billion payout, The New York Times reports the bank has more than $100 billion in exposure related to mortgage-backed securities still to be decided in court. The final tally on the expected $13 billion settlement with U.S. regulators is forthcoming.

Last month, JPMorgan disclosed it had set aside $23 billion in reserves for different litigation fees. In the statement announcing the November 15 settlement, the bank seemed confident it had prudently reserved its money to pay these extravagant costs without disrupting the flow of business.