JPMorgan Facing $6bn in Fines over Mis-Selling Mortgage-Backed Securities

 

” US banking major JPMorgan Chase is facing another regulatory blow with an expected multi-billion dollar fine related to lawsuits over its selling of bonds backed by subprime mortgages. 

Housing finance authorities in the US are demanding fines up to $6bn (£3.9bn, €4.5bn) to settle lawsuits over mis-selling securities to state-backed mortgage companies, Fannie Mae and Freddie Mac, according to media reports.

The US Federal Housing Finance Agency (FHFA) has earlier sued JPMorgan along with several other banks and financial institutions for misrepresentation in selling mortgage-backed securities in the run-up to the financial crisis. The regulator alleged that JPMorgan “significantly overstated the ability of the borrowers to repay their mortgage loans” while selling $33bn of mortgage-backed securities to Fannie Mae and Freddie Mac.

The FHFA, which regulates Fannie Mae and Freddie Mac, noted that the mortgage companies suffered significant losses as the value of the securities declined sharply after borrowers started defaulting on their loans during the 2007 crisis period.”

 

 

 

 

 

 

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