MIKE SEGAR/REUTERS
JPMorgan Chase, the country’s largest bank, agreed to pay $ 5.1 billion in a settlement with the Federal Housing Finance Agency over claims that the bank misled Fannie Mae and Freddie Mac about risky home loans.
WASHINGTON — JPMorgan Chase, the country’s largest bank, has agreed to pay $ 5.1 billion to resolve claims it misled Fannie Mae and Freddie Mac about risky home loans and mortgage securities it sold them before the housing market collapsed.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with JPMorgan.
A broader deal with the Justice Department is still being negotiated.
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JPMorgan sold $ 33 billion in mortgage securities to Fannie and Freddie between 2005 and 2007, according to the agency.
That was the second-most sold to Fannie and Freddie ahead of the crisis, behind Bank of America.
The securities soured after the housing bubble burst in 2007, losing billions in value.
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The government rescued Fannie and Freddie during the financial crisis when both were on the verge of collapse.
The companies received taxpayer aid totaling $ 187 billion. They have since become profitable and repaid $ 146 billion.
New York-based JPMorgan will pay about $ 2.74 billion to Freddie and $ 1.26 billion to Fannie for the securities it sold.
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JPMorgan is also paying $ 1.1 million for home loans the bank sold to Fannie and Freddie before the crisis.
JPMorgan reached a tentative agreement with the Justice Department last weekend to pay $ 13 billion over bad loans and mortgage securities the bank sold.
The FHFA originally participated in those negotiations. It’s unclear when the broader agreement will be finalized.
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