JP Morgan Chase, government reach $13 billion settlement, including $299 million for California

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JP Morgan Chase & Co. reached a record $13 billion settlement Tuesday with state and federal agencies over the bank's sale of mortgage-backed securities that collapsed during the U.S. housing crisis, including almost $300 million for California, according to a press release from state Attorney General Kamala Harris.

The settlement announced Tuesday requires JPMorgan to pay $9 billion and provide $4 billion in consumer relief, including reducing the principal on loans along with other mortgage modifications for homeowners facing foreclosure, according to the Associated Press.

It also includes $4 billion in relief to aid consumers harmed by JP Morgan Chase, Bear Stearns and Washington Mutual, according to the release, including loan modifications and forgiving the principal on loans.

California is going to get $298,973,000 in damages from the sale by JP Morgan of mortgage-backed securities to the state's public employee and teacher pension funds, CalPERS and CalSTRS, between 2004 and 2008, according to the release. It stems from what Harris calls "misrepresentations" in how those securities were sold.

"JP Morgan Chase profited by giving California’s pension funds incomplete information about mortgage investments," Harris said in the release. "This settlement returns the money to California’s pension funds that JP Morgan wrongfully took from them."

Harris asserts that an investigation conducted by her office revealed that the characteristics of the securities' underlying mortgages weren't disclosed when they were sold, and that there wasn't adequate due diligence to weed out poor quality loans.

According to the release, the reimbursement to CalPERS and CalSTRS includes investments from Washington Mutual and Bear Stearns, who JP Morgan acquired following their failures.

The overall settlement is the largest settlement ever between the Department of Justice and a corporation, according to the Associated Press.

New York Attorney General Eric Schneiderman, who sued JPMorgan in 2012, says the state will get $613 million in cash and about $400 million in relief for struggling homeowners, the AP reports.

The deal resolves claims against JPMorgan, Bear Stearns and Washington Mutual before 2009, according to the AP.

With contributions by AP

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