JPMorgan paying $5.1B in Fannie, Freddie deal

Associated Press

WASHINGTON

JPMorgan Chase has agreed to pay $5.1 billion to resolve claims that it misled Fannie Mae and Freddie Mac about risky home loans and mortgage securities it sold them before the housing market collapsed.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with JPMorgan, the largest U.S. bank. A broader deal with the Justice Department is being negotiated.

JPMorgan sold around $33 billion in mortgage securities to Fannie and Freddie between 2005 and 2007, according to the agency.

The securities soured after the housing bubble burst in 2007, losing billions in value.

Fannie and Freddie were rescued in a taxpayer bailout in 2008.