JPMorgan to pay $5.1 billion over mortgages

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NEW YORK — JPMorgan Chase & Co. will pay $5.1 billion to resolve claims over faulty investments sold to mortgage giants Fannie Mae and Freddie Mac in the lead-up to the financial crisis.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the deal late Friday.

The $5.1 billion sum is part of a total $13 billion settlement between JPMorgan and the federal government that has been in the works and which could be announced in coming days.

The timing was still unclear, according to a person familiar with the matter but who was not authorized to speak publicly.

The agreement would resolve claims that JPMorgan and two troubled banks it purchased during the financial crisis -- Bear Stearns and Washington Mutual -- packaged bad loans and then sold residential mortgage-backed securities that later went south.

Under the deal, JPMorgan will pay $2.74 billion to Freddie and $1.26 billion to Fannie. In a separate settlement, the bank will also resolve "representation and warranty claims" by paying $1.1 billion more to both entities.