JPMorgan Chase & Co. (JPM) will pay $614 million to settle claims it improperly approved Federal Housing Administration and Veterans Affairs loans that weren't eligible for insurance from those agencies because they didn't meet underwriting requirements.
JPMorgan acknowledged in the agreement that it violated the False Claims Act and failed to inform the agencies when its own internal reviews discovered more than 500 defective loans that shouldn't have been submitted for FHA and VA insurance, the Justice Department said today in a statement.
"This settlement recovers wrongfully claimed funds for vital government programs that give millions of Americans the opportunity to own a home and sends a clear message that we will take appropriately aggressive action against financial institutions that knowingly engage in improper mortgage lending practices," Associate Attorney General Tony West said in the statement.
U.S. District Court Judge J. Paul Oetken in Manhattan issued an order today unsealing the complaint, originally filed in January 2013.
"The settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it," the New York-based bank said in a statement.
The case is U.S. v. JPMorgan Chase Bank, 13-cv-00220, U.S. District Court, Southern District of New York (Manhattan).