JPMorganChase building in Manhattan
After JPMorgan's settlement with the government on Tuesday It makes for fascinating reading a comment made by the bank as to its financial conduct prior to the fall of 2008 but also the "Statement of Facts" (more on this later) the bank had to admit to as part of the $13 billion settlement with the Justice Department over its role in selling toxic mortgage backed securities to unwitting large institutional investors who thought they were safe but as we all know became worthless when the sub-prime mortgage bubble burst in 2008.
And just how did the bank put it in agreeing to the settlement, "We "routinely' overstated the quality of mortgages sold to investors".
Saying its was "routine" makes it appear as if it was a simple oversight on their part making it seem the securities they sold weren't toxic even though the mortgage loans that backed the securities did not meet underwriting guidelines.
But ah contraire; the bank knew exactly what it was doing.
As part of the settlement the bank had to admit to the government the aforementioned "Statement of Facts", an 11 page document made public on Tuesday.
The following is a synopsis of those "Statement of Facts":
- As the bank packaged the mortgages into complex securities it promised to alert investors to any flaws that might raise questions about the loans.