Financial giant JPMorgan Chase has reached a USD 4.5 billion dollar with 21 major institutional investors to resolve legal issues pertaining to mortgage-backed securities.
JPMorgan has agreed to make a binding offer to the trustees of 330 residential mortgage-backed securities (RMBS) trusts sold by JPMorgan, Chase, and Bear Stearns.
"This settlement is another important step in JP Morgan's efforts to resolve legacy related RMBS matters. The firm believes it is appropriately reserved for this and any remaining RMBS litigation matters," the company said in a statement.
Under the agreement, JPMorgan would resolve all representation and warranty claims as well as servicing claims on all trusts issued by it, Chase and Bear Stearns between 2005 and 2008.
The offer, which would remain open till January 15, 2014 and can be extended for an additional sixty days, includes terms like payment of USD 4.5 billion in cash by J P Morgan to settle all representation and warranty claims as well as servicing claims that have been or could have been asserted by mortgage-backed securities.
The USD 4.5 billion agreement is separate from the 13 billion dollar settlement that JPMorgan has reached with the Justice Department over the bank's mortgage practices in the run-up to the financial crisis.