By Jeff Bater
Sept. 22 — JPMorgan Chase has satisfied its $4 billion consumer relief obligations under a 2013 mortgage-securities settlement with the Justice Department, a court-appointed monitor said.
The settlement monitor, Joseph A. Smith Jr., has credited the bank with providing principal forgiveness and forbearance, rate reductions and other assistance to mortgage borrowers, ahead of schedule.
JPMorgan Chase was required to provide the consumer relief by the end of 2017 under its $13 billion settlement with the federal government and five states concerning claims that Chase, Bear Stearns and Washington Mutual packaged and sold bad residential mortgage-backed securities to investors before the financial crisis. JPMorgan Chase acquired Bear Stearns and Washington Mutual during the 2008 crisis.
“Chase has satisfied its consumer relief obligation,” Smith said in a news release Sept. 22. “The servicer has provided more than $4.06 billion to more than 168,000 borrowers before the deadline specified in the settlement.”
The progress report by the settlement monitor, based in Raleigh, N.C., is the final one on JPMorgan Chase’s consumer relief obligation under the 2103 agreement.
The Justice Department and other federal and state authorities in November 2013 unveiled a $13 billion settlement with JPMorgan Chase. Smith's firm, which specializes in the independent oversight of complex financial services settlements, was appointed to oversee the consumer relief obligations included in the accord.
Aside from the $4 million commitment, meant to help borrowers remain in their homes, the settlement included $9 billion in cash payments to settle federal and state claims stemming from residential mortgage-backed securities packaged, marketed, issued or sold prior to Jan. 1, 2009, by JPMorgan, Bear Stearns, and Washington Mutual.
While the $4 billion is the consumer relief portion that the bank had to meet by the 2017 deadline and what it is credited for, JPMorgan, on a gross dollar basis, provided $20.2 billion in principal forgiveness and forbearance, rate reduction and eligible lending to 168,960 borrowers as of March 31, 2016. The $4 billion figure is included in the $20 billion total.
“We are pleased to have fulfilled our requirements under the settlement,” the company said in a statement. “The $20 billion in consumer relief we’ve provided to customers over the last several years is part of our ongoing efforts to help families and communities that may be struggling.”
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