""JPMorgan Chase & Co."":http://www.jpmorganchase.com has reached a $4.5 billion agreement with 21 institutional investors to settle mortgage repurchase and servicing claims on 330 residential mortgage-backed securities (RMBS).[IMAGE]
JPMorgan will make a binding offer to the trustees of the RMBS trusts issued by J.P. Morgan, Bear Stearns, and Chase. The group of investors support the arrangement, according to the Houston-based law firm representing the group, ""Gibbs & Bruns LLP"":http://www.gibbsbruns.com/, and have asked the trustees to accept JPMorgan's offer.
JPMorgan called the settlement ""another important step"" in its efforts to resolve legacy RMBS matters and said it believes it is ""appropriately reserved for this and any remaining RMBS litigation matters.""
The trustees have until January 15, 2014, to accept the offer, which may be extended pursuant to the terms of the offer for an additional 60 days. The offer includes the following key terms:
1. Payment by JPMorgan of $4.5 billion in cash to the trusts to settle mortgage repurchase and servicing claims;
2. Implementation of certain servicing changes to mortgage loans in the trusts;
3. Reimbursement to the trustees for expenses associated with their evaluation of the offer;[COLUMN_BREAK]
4. A release of all repurchase and servicing claims that have been or could have been asserted by the 330 trusts; and,
5. Continuation of a previously agreed tolling and forbearance agreement among JPMorgan and the trustees to permit the trustees to evaluate the proposed settlement.
The institutional investors who are parties to the agreement include:
Ã¢â‚¬" AEGON USA Investment Management
- Bayerische Landesbank
- BlackRock Financial Managemet
- Cascade Investment
- Fannie Mae
- Federal Home Loan Bank of Atlanta
- Freddie Mac
- Goldman Sachs Asset Management
- ING Investment Management Co.
- ING Investment Management
- Invesco Advisers
- Kore Advisors
- Landesbank Baden-Wuerttemberg
- Metropolitan Life Insurance Company
- Pacific Investment Management Company
- Sealink Funding Limited
- Teachers Insurance and Annuity Association of America
- The Prudential Insurance Company of America
- The TCW Group
- Thrivent Financial for Lutherans
- Western Asset Management Company
Pursuant to the agreement, the institutional investors have requested that the trustees accept the settlement.
They also agreed to use their reasonable best efforts to obtain court approval of the settlement if the trustees elect to seek a judicial instruction concerning their decision to accept the settlement. JPMorgan also agreed to pay the investors' attorneysÃ¢â‚¬â„¢ fees.