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A federal judge has approved JPMorgan Chase's $500 million settlement with four pension funds over the sale of faulty mortgage-backed securities by Wall Street investment firm Bear Stearns before the financial crisis. JPMorgan Chase acquired Bear Stearns in March 2008 at a stock-only price of $236 million, or $2 per share. In their lawsuit, the pension funds accused Bear Stearns of selling $17.6 billion worth of toxic mortgage-backed securities to them in the run-up to the crisis.
The terms of the settlement were approved by Judge Laura Taylor Swain in the U.S. District Court for the Southern District of New York in Manhattan. According to the terms of the settlement, the defendants were not required to admit any fault or wrongdoing. Pension funds to which the settlement money will be allocated are the Public Employees' Retirement System of Mississippi, the New Jersey Carpenters Health Fund, the Police and Retirement System of Detroit, and the State of Oregon.
U.S. Representative Maxine Waters has written a letter to Department of Housing and Urban Development Secretary Julián Castro asking for relief and more transparency for seniors participating in HUD's Home Equity Conversion Program. At the center of the issue is the fate of surviving non-borrowing spouses upon the death of the last remaining note holder listed on the mortgage for HECM participants. Many of these borrowers have faced or will face foreclosure under current HECM protocol.
