JP Morgan Chase, the largest U.S. bank, has reached a tentative $13 billion deal with the Justice Department in a settlement of a wide-range of issues related to the sale of bad mortgages, according to several media reports.
Reports by the Associated Press, TheWall Street Journal and Bloomberg News, cited unnamed sources with knowledge of the negotiations, indicating that the record-size deal, if finalized, would not release the bank from potential criminal liability.
The Journal quoted "a person familiar with the decision" Saturday as saying the settlement would cover outstanding investigations of the bank's residential mortgage-backed securities business.
Bloomberg.com carries a similar report, also quoting a person familiar with the settlement negotiations, and calls the deal a "tentative resolution of all civil mortgage-bond related matters.
Bloomberg notes, however, that the tentative pact does not include a release of potential criminal liability. The report quotes the unidentified source as saying the proposed accord will probably require the bank to cooperate in criminal investigations of individuals tied to wrongdoing associated with the bank's mortgage practices.
A breakthrough in long-running talks came Friday night, after U.S. Attorney General Eric Holder and JPMorgan CEO Jamie Dimon spoke by phone and the bank agreed to leave criminal liability out of the deal, a source familiar with the talks tells Reuters.
Bloomberg reports that the deal would include a tentative $4 billion settlement with the Federal Housing Finance Agency over the bank's sale of mortgage-backed securities.
The tentative agreement would include $9 billion in fines and $4 billion in relief for struggling homeowners, The New York Times reported, citing people briefed on the talks.
New York Attorney General Eric Schneiderman's office, which is involved in the settlement negotiations, declined to comment Saturday.