JPMorgan Chase may need to pay more than the $4.5 billion it offered to settle investor claims over faulty mortgages packaged into securities before the U.S. housing crash, a report prepared for bond trustees shows.

Trustees should reject the accord struck last November with a group of bondholders for 16 of the 330 deals included, and it's a "close call" for three others, according to the report posted online this week by Daniel Fischel, president of Compass Lexecon, which is among firms hired by the securities administrators to help evaluate the offer.

"Based on the reports by the expert advisors, there exists a meaningful possibility that trustees may not accept the proposed settlement offer for all 330 trusts," Nomura Holdings Inc. analysts including Paul Nikodem and Pratik K. Gupta wrote yesterday in a research note.

JPMorgan negotiated the proposed settlement with 21 institutional investors including BlackRock Inc. and Pacific Investment Management Co. in a bid to move past legal troubles tied in part to the housing crisis. The accord was announced the week before the largest U.S. bank agreed to a record $13 billion settlement with government agencies over faulty mortgage securities.

Trustees including Deutsche Bank AG, Wells Fargo & Co. and Bank of New York Mellon Corp. must decide whether to accept JPMorgan's proposal by Aug. 1. The deadline has been pushed back at least twice from an original date of March 16.

Brian Marchiony, a spokesman for New York-based JPMorgan, declined to comment, as did Jen Hibbard of Wells Fargo. Kathy Patrick, a lawyer at Gibbs & Bruns LLP representing the investors who negotiated the deal, didn't immediately respond to an e-mail seeking comment, nor did Kevin Heine, a spokesman for Bank of New York, and Renee Calabro of Deutsche Bank.

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