Divvying up the $13 billion JP Morgan fine

JPMorgan Chase & Co.'s Manhattan headquarters.

Banking giant JPMorgan Chase reportedly has a tentative deal to pay a $13 billion settlement because of problematic mortgage investments it sold in the days before the financial crisis. 

The tentative deal is said to aside $4 billion for consumers, some of which could make its way to Laura Bradley. The Virginia woman lost her job during the downturn and says she asked JPMorgan to modify the loan on her family’s home. After much back and forth, a call finally came one night. The bank said no, unless Bradley’s family paid the $10,000 they were behind. It was the end.

“I didn’t have $10,000. So I said they’re gonna have to foreclose on our home,” Bradley remembers. “It was a very, very scary time.”

Later, they lost their home. Not enough is known about the settlement to confirm whether Bradley or someone like her would be eligible for anything.

Even though $4 billion is a giant number, homeowners shouldn’t expect much, considering the enormity of JPMorgan’s mortgage business.

“JPMorgan probably has five million mortgages, so we’re probably talking somewhere in the neighborhood of $800 per mortgage,” says Arizona State finance professor Andra Ghent.

That’s not going to do much for someone who lost their home and saw their credit score destroyed. But current homeowners in trouble could see meaningful benefits.

“The details of it are likely to be much like those of prior settlements, which have included modifications that help homeowners get out of these loans or enable them to carry them on terms that they are able to meet,” says Barry Zigas, who directs housing policy for Consumer Federation of America.

As for Laura Bradley, she has a job again. She and her family, now renters, have moved on.

“I think it is too little, too late,” she says about the settlement. “The only thing I ever wanted from our mortgage holder was the ability to stay in the home where I was raising my children. I say onward and upward and I don’t want anything from JPMorgan Chase.”

No settlement would undo the devastation of foreclosure. But JPMorgan customers who suffered and got nothing, may soon have something. And the settlement could set precedent for other big banks to make similar deals.

Mark Garrison: Some of that money might go to Laura Bradley, who lost her job during the downturn. She says she asked JPMorgan to modify the loan on her family’s Virginia home. But the only way to get that was to pay the ten grand they were behind. It was the end.

Laura Bradley: I didn’t have $10,000. So I said they’re gonna have to foreclose on our home. It was a very, very scary time.

Later, they lost their home. We don’t whether someone like Bradley would get anything. But even though the reported $4 billion dollars is a giant number, homeowners shouldn’t expect much. Arizona State finance professor Andra Ghent puts it in perspective.

Andra Ghent: JPMorgan probably has 5 million mortgages, so we’re probably talking somewhere in the neighborhood of $800 per mortgage.

That’s not gonna do much for someone who lost their home and saw their credit score destroyed. Barry Zigas of Consumer Federation of America says current homeowners in trouble could benefit.

Barry Zigas: The details of it are likely to be much like those of prior settlements, which have included modifications that help homeowners get out of these loans or enable them to carry them on terms that they are able to meet.

Laura Bradley has a job again. She and her family, now renters, have moved on.

Bradley: I think it is too little, too late. The only thing I ever wanted from our mortgage holder was the ability to stay in the home where I was raising my children. I say onward and upward and I don’t want anything from JPMorgan Chase.

No settlement would undo the devastation of foreclosure. But JPMorgan customers who suffered and got nothing, may soon have something. In New York, I'm Mark Garrison, for Marketplace.

About the author

Mark Garrison is a reporter and substitute host for Marketplace, based in New York.

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