JPMorgan Chase (JPM) will pay nearly one-fifth of the total cost of the settlement reached this week between regulators and 10 of the nation's biggest lenders.
The $10 billion settlement that the banks reached with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve will cost JPMorgan Chase nearly $2 billion, the bank revealed in a filing with the Securities and Exchange Commission. The settlement will end the troubled foreclosure-review process, which provided homeowners little relief at high cost to the banks.
Of JPMorgan Chase's share of the settlement, $753 million will be placed in a fund to be distributed to affected borrowers and $1.2 billion will be set aside for "foreclosure-prevention actions." The $1.2 billion will be paid under the same framework that banks and regulators established in last year's $25 billion foreclosure settlement between the nation's five-largest mortgage servicers and attorneys general in 49 states.
The company will take a $700 million charge in the fourth quarter from the settlement.
JPMorgan Chase earned a record $5.7 billion in profit in the third quarter of 2012. Bloomberg analysts expect the bank to announce earnings of $5 billion in the fourth quarter.
The company plans to release its fourth-quarter earnings on Jan. 16.
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