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JP Morgan Chase Paid More than Half of $4 Million Settlement

An independent monitor verpaying-moneyified in his fourth report on JPMorgan Chase's progress under its November 2013 settlement with the government over the packaging and selling of faulty residential mortgage-backed securities that the bank has paid more than half of the $4 billion amount it agreed to pay toward consumer relief, according to an announcement from independent monitor Joseph A. Smith, Jr. on Thursday.

Smith verified Chase's claim made in December that the bank had provided $2.24 billion in consumer relief credit to 111,924 borrowers as of the end of the third quarter (September 30, 2014). Chase has until December 31, 2017 – nearly three full years – to pay the approximate remaining amount of nearly $1.8 billion of its obligation toward consumer relief under the settlement.

"After in-depth formula testing and data review, I have credited Chase with more than half of the $4 billion in consumer relief credit it must provide under this agreement," Smith said. "I look forward to reporting on my next round of testing mid-year. In addition to its consumer relief requirements, I have no reason to believe that Chase has failed to comply with any of the policy-based, non-creditable requirements of the settlement."

The $2.24 billion in consumer relief with which Chase was officially credited has come in the form of principal reduction, loan modification, and refinancing for borrowers facing foreclosure. The breakdown of the $2.24 billion in consumer relief is as follows: $555.88 million in modification – forgiveness/forbearance, $791.76 million in rate reduction, and $898.04 million in low to moderate income and disaster area lending.

In Smith's fourth report, Chase said it has provided $5.1 billion in principal forgiveness and forbearance, rate reduction, and low-to-moderate or disaster area lending to 39,512 borrowers as of the end of Q4 (December 31, 2014).  Chase also claimed that 151,436 borrowers had received some type of relief, including $1.95 billion in principal forgiveness or forbearance, $1.11 billion rate reduction, and $15.77 billion in eligible lending. Those figures are awaiting validation from Smith.

Chase settled with the government in November 2013 for a then-record $13 billion amid claims that the bank, along with Bear Stearns and Washington Mutual, sold faulty residential mortgage-backed securities to investors prior to the financial crisis. Chase was required to make $9 billion in direct payments to government agencies and five states and provide $4 billion in consumer relief under the settlement.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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