JPMorgan in Pact With Ambac, Step to $4.5 Billion Mortgage Deal
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Settlement with bond insurer is over bad-loan crisis of 2008
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The $995 million accord now puts focus on Bank of America
JPMorgan Chase & Co. agreed to pay $995 million to resolve claims by Ambac Financial Group Inc. that it was duped into insuring mortgage bonds backed by shoddy loans, paving the way for approval of a much larger settlement between the bank and institutional investors stemming from the global financial crisis.
As part of the accord, Ambac will drop its objections to a $4.5 billion pact between JPMorgan and investors including BlackRock Inc. and Pacific Investment Management Co. centering on claims of faulty home loans. That brings the banking industry one step closer to resolving litigation over the “toxic” mortgage debt that fueled the crisis. An Ambac unit was the world’s second-biggest bond insurer in 2008 when mounting defaults on mortgages swamped it with claims…
JPMorgan in Pact With Ambac, Step to $4.5 Billion Mortgage Deal
