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HomebanksJPMorgan to pay $614 million to settle mortgage fraud case

JPMorgan to pay $614 million to settle mortgage fraud case

JPMorgan Chase & Co has agreed to pay $614 million to the U.S. government to settle claims it defrauded federal agencies by underwriting sub-standard mortgage loans, the U.S. Justice Department said on Tuesday.

JPMorgan, the largest U.S. bank by assets, is admitting in the settlement that for more than a decade it approved thousands of loans that were not eligible for insurance by the Federal Housing Administration or the Department of Veterans Affairs, the department said in a statement.

(Read more: JPMorgan's post-Madoff reforms will be hidden from public)

Adam Jeffery | CNBC

As a consequence, "both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses," the Justice Department said.

The settlement was filed in U.S. District Court for the Southern District of New York and was approved by Judge J. Paul Oetken, according to a statement from the U.S. Attorney's Office in Manhattan.

The bank said in a statement that the "settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it."

(Read more: Five years later, Madoff still trying to control the story)

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