U.S. bonds.
U.S. bonds. - 
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Kai Ryssdal: It occurred to me this morning as we were trying to figure out what to put on the air this afternoon that it's now been four years since we all became more familiar than we'd like with the phrase "mortgage-backed securities." The summer of 2007 was when it all really started to go bad -- and the news of the day this Tuesday tells us the after-effects are going to linger for a while. This morning J.P. Morgan Chase agreed to pay more than $150 million to settle charges it sold bad mortgage bonds just as the crisis was starting. And the bank is still in regulatory crosshairs, along with the Royal Bank of Scotland. Prosecutors say the pair tricked five wholesale credit unions into buying billions in risky mortgage packages that put all five out of business.

Our senior business correspondent Bob Moon has more.

Bob Moon: Just how risky were the mortgages bundled in these investment bonds? Regulators at the National Credit Union Administration say in some cases, the banks claimed the bonds were backed by mortgages with near zero delinquencies, but as soon as they were sold, defaults spiked so high, the bonds became nearly worthless.

At the Center for Media and Democracy, Mary Bottari says these lawsuits are no surprise, given a recent congressional inquiry into similar sales by Goldman Sachs.

Mary Bottari: It is a revelation when you see emails referring to these products that are being sold as "trash." When they find someone to sell one of these products to, they call it "pink elephants and unicorns!" There is clearly a contempt for the people that they were selling these dangerous products to.

Bottari sees a flurry of lawsuits ahead.

Bottari: When you're dealing with JPMorgan Chase, the Royal Bank of Scotland, you're dealing with some of the major, major players in the industry. So you have to assume that this sort of double-dealing was a widespread problem.

The New York Post reports the federal agency is planning suits against other banks, including Goldman Sachs, Bank of America and Citigroup.

Attorney Jacob Frenkel is a former enforcement lawyer for the Securities and Exchange Commission. He says these lawsuits could be a road map for investors to file their own lawsuits.

Jacob Frenkel: Others will look closely at the nature of the claims the NCUA filed, and determine whether those claims can, in fact, be a template for private causes of action by other institutions.

Frenkel says many banks have already set aside cash to cover these potential damages. But he says they'll remain under this legal cloud for years to come.

I'm Bob Moon for Marketplace.