USAO, Southern District of New York Press Release

In Settlement, Bank Admits and Accepts Responsibility for Improperly Approving Thousands of Mortgage Loans for Government Insurance, and Agrees to Implement Enhanced Quality Control Program to Protect Against Future Violations

Preet Bharara, the United States Attorney for the Southern District of New York, Associate Attorney General Tony West, Stuart F. Delery, the Assistant Attorney General for the Justice Department’s Civil Division, Damon Smith, Acting General Counsel of the U.S. Department of Housing and Urban Development (“HUD”), David A. Montoya, Inspector General of HUD, and Richard J. Griffin, Acting Inspector General of the U.S. Department of Veterans Affairs (“VA”), announced today that the United States has filed, and simultaneously settled, a civil fraud lawsuit against JPMORGAN CHASE & CO. and JPMORGAN CHASE BANK, N.A. (collectively, “JPMORGAN CHASE”), for improperly approving thousands of residential home mortgage loans for government insurance and refinancing.

In the settlement, JPMORGAN CHASE admitted, acknowledged, and accepted responsibility for, among other things, submitting false certifications to HUD, the VA, and the Federal Housing Administration (a component of HUD, and, together with HUD, “HUD-FHA”) that: (1) induced HUD-FHA and the VA to accept for government insurance and refinancing thousands of loans that were not eligible for such insurance or refinancing; and (2) ultimately resulted in substantial losses to the Government when the loans defaulted. JPMORGAN CHASE also admitted to failing to self-report to HUD-FHA hundreds of loans that it had identified as fraudulent or otherwise deficient, and to submitting loan data to HUD-FHA that lacked integrity...