JP Morgan has reached a $5.1 billion agreement in the US to resolve all of its mortgage-backed securities litigation stemming from the purchase of these securities by the Fannie Mae and Freddie Mac mortgage agencies.

[tag|JP Morgan|]JP Morgan[/tag] has reached a $5.1 billion agreement in the US to resolve all of its mortgage-backed securities litigation stemming from the purchase of these securities by the Fannie Mae and Freddie Mac mortgage agencies.

The settlement is with the Federal Housing Finance Agency in its role as “conservator” for Freddie Mac and Fannie Mae for $4 billion.

“This settlement resolves the firm’s largest MBS case and relates to approximately $33.8 billion of securities purchased by Fannie Mae and Freddie Mac from JP Morgan, Bear Stearns and Washington Mutual. The firm has also simultaneously agreed to resolve Fannie Mae’s and Freddie Mac’s repurchase claims associated with whole loan purchases from 2000 to 2008, for $1.1 billion,” according to a statement from the US-listed banking group.

“Today’s settlements totalling $5.1 billion are an important step towards a broader resolution of the firm’s MBS-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies,” the statement added.

The settlement, announced last Friday, comes against a backdrop of a difficult period for the bank regarding such issues. In September, UK and US regulators fined JP Morgan a total of $920 million for “serious failings” relating to trades carried out by the firm’s Chief Investment Office and disclosed last year. The bank agreed to settle actions brought by the US Securities and Exchange Commission, who imposed a financial penalty of $200 million and required the firm to admit wrongdoing; the Office of the Comptroller of the Currency, who imposed a financial penalty of $300 million, and the Federal Reserve, who imposed a financial penalty of $200 million. In addition, the UK Financial Conduct Authority fined the bank $220 million.

Until these issues arose, JP Morgan had been seen as one of the few US banks to have emerged from the 2008 financial crisis with its status enhanced. The fine adds to those imposed on other firms for issues such as rigging interbank interest rates, for example.

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