Big Banks in Big Trouble Over Meltdown
The settlement, which has yet to be finalized, relates to mortgage-backed securities sold by JPMorgan and the firms it later purchased, Bear Stearns and Washington Mutual. These securities, created by bundling payments from individual mortgages, were a key cause of the financial crisis, failing in huge numbers as the housing market imploded and borrowers defaulted on their loans.
The pending settlement, which has been billed as the largest ever for a financial firm, drew JPMorgan CEO Jamie Dimon personally to the Justice Department last month for negotiations with Attorney General Eric Holder. But several billion dollars’ worth of the deal under discussion relate to a lawsuit filed by the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac.
Tags: big banks