JPMorgan Chase & Co has agreed to pay $614 million to the U.S. government to settle claims it defrauded federal agencies by underwriting sub-standard mortgage loans, the U.S. Justice Department said on Tuesday.
JPMorgan, the largest U.S. bank by assets, is admitting in the settlement that for more than a decade it approved thousands of loans that were not eligible for insurance by the Federal Housing Administration or the Department of Veterans Affairs, the department said in a statement.
As a consequence, "both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses," the Justice Department said.
The settlement was filed in U.S. District Court for the Southern District of New York and was approved by Judge J. Paul Oetken, according to a statement from the U.S. Attorney's Office in Manhattan.
The bank said in a statement that the "settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it."
The company said it has already recorded reserves for the settlement and does not expect the deal to have any significant additional financial impact.
Last year, the company agreed to about $20 billion in settlements in its drive to clear up legal claims. The deals covered claims over other mortgage issues, as well as derivatives and power trading.
On Monday, the company agreed to pay $1.45 million to settle four-year-old allegations brought by the U.S. Equal Employment Opportunity Commission that the bank had maintained a sexually hostile environment for women in a mortgage loan center on Ohio.