Morgan Stanley and JPMorgan Chase & Co. agreed to pay $1.86 billion to end U.S. accusations of misconduct in their handling of home loans and related securities that left taxpayers shouldering losses after the financial crisis, Bloomberg News reported today. Morgan Stanley said yesterday it reached a $1.25 billion deal to end Federal Housing Finance Agency claims the bank sold faulty mortgage bonds to Fannie Mae and Freddie Mac before the firms’ losses pushed them into U.S. conservatorship. JPMorgan will pay $614 million after admitting it submitted ineligible loans for Federal Housing Administration and Veterans Affairs insurance. The six largest U.S. lenders have allocated more than $114 billion since the financial crisis to cover legal expenses, government probes and mortgage-related claims.
