NEW YORK -- JPMorgan Chase and U.S. government officials have agreed on terms of a $4 billion consumer relief package that is to be part of a $13 billion deal to settle the bank's liability to government agencies over mortgage securities, according to a person familiar with the matter.
The $4 billion portion of the deal would pay for write-downs of mortgage loans, demolition in blighted areas and lower monthly payments for homeowners, the person said Monday.
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, was involved with the negotiations which have come under the umbrella of a broader settlement between the bank and the U.S. Department of Justice, the person said.
Of the $4 billion, about $1.5 billion is to be earmarked for write-downs of loans that exceed the property value and as much as $500 million more would go for restructuring loans to lower monthly payments. %VIRTUAL-article-sponsoredlinks%The remaining $2 billion would go for assorted measures, including new loans for low- and moderate-income borrowers in areas that have been hard-hit by the housing crisis and demolition of abandoned homes, the person said.
The agreement is to require JPMorgan (JPM) to spend the money by the end of 2016 under the watch of a independent monitor, the person said.
The final $13 billion deal is likely to be announced Tuesday, the person said. Another source familiar with the matter said earlier in the day that that announcement could be in the next day or two. Neither sources was authorized to speak on the record about the matter.
The total deal is also to include a $2 billion penalty and at least $4 billion for federal housing finance agencies under a previously announced agreement.
The fact that the $13 billion deal would include $4 billion for some form of "consumer relief" has been known for weeks. The details of how the $4 billion would be spent were reported earlier Monday by the Wall Street Journal (subscription required).
Forbes' World’s Most Powerful People List, 2013 Edition
JPMorgan, Gov't Set Terms for $4 Billion Piece of $13 Billion Deal
Who’s more powerful: the omnipotent head of a corroding but still feisty power or the handcuffed head of the most dominant country in the world? This year’s snapshot of power puts the Russian president on top. Putin has solidified his control over Russia (“dictator” is no longer an outlandish word to ponder) and the global stage. Anyone watching the chess match over Syria has a clear idea of the shift in the power towards Putin. The ex-KGB strongman -- who controls a nuclear-tipped army, a permanent seat on the UN Security Council and some of the world's largest oil and gas reserves -- is allowed to serve two more terms, which could keep him office until 2024.
His signature legislation, Obamacare, is under fire, U.S. allies are outraged over NSA surveillance overseas, and the government shutdown for 16 days in October begs the question: Who's in control here? It appears that President Obama's lame duck period has set in earlier than usual for a two-term president, causing him to drop one notch from the No. 1 spot. To be sure, though, the leader of the free world remains in charge of the most powerful nation in the world, with the largest, most innovative economy and the deadliest military.
Recently promoted in March, the 60-year-old is the paramount political and military leader of China. Xi exercises near dictatorial control over 1.3 billion people (close to 20% of the world's population). China has the world's largest central bank, with $3.5 trillion in assets -- and owns some $1.3 trillion in U.S. securities, making it the largest foreign shareholder of U.S. debt. Along with India, the country is predicted to overtake the U.S. in aggregate GDP in coming decades; it is currently $8.2 trillion. There are 122 billionaires in the country, up from zero one decade ago. In addition to his title of general secretary of the Communist Party in China, Xi is also president of the People's Republic of China and the chairman of the Central Military Commission.
The March election of Pope Francis has injected new energy into the world’s largest religion, with 1.2 billion followers around the world. The first Jesuit and Latin American Vicar of Christ preaches compassion for the poor and a greater role for women while signaling for the church to quiet its focus on “only on issues related to abortion, gay marriage and the use of contraceptives." He has embraced social media, regularly using Twitter to dispense religious advice to his 10 million followers and is responsible for the world's first papal "selfie." Born in Buenos Aires as one of five children of an Italian immigrant railway worker, Pope Francis (né Jorge Mario Bergoglio) is an avid FIFA fan and cheers the San Lorenzo de Almagro club.
The world's most powerful woman is the backbone of the 27-member European Union and carries the fate of the euro on her shoulders as Germany's chancellor. Merkel's hard-line austerity prescription for easing the European debt crisis has been challenged by both hard-hit southern countries and the more affluent north, most particularly French President Francois Hollande. Merkel is fresh off a commanding reelection victory, and has served as chancellor since 2005; the first woman in the position. Merkel has earned the top spot on the FORBES list of Most Powerful Women In The World for eight of the past 10 years.
Gates is the wealthiest man in the U.S., despite his past gifts of more than $28 billion to the Bill & Melinda Gates Foundation. He bolstered his foundation's efforts to eradicate polio in April, securing $335 million in pledges to the cause from six billionaire comrades, including $100 million each from Mexico's Carlos Slim and New York City Mayor Mike Bloomberg. Shares of Microsoft jumped in late August on news that Steve Ballmer will step down as CEO; Gates will remain chairman of the software company he cofounded with Paul Allen in 1975. He and fellow Most Powerful Warren Buffett have thus far convinced over 100 billionaires to sign on to the Giving Pledge, a promise to donate at least half one's net worth to charity.
Big Ben is stepping down as of Jan. 31, 2014, and Janet Yellen has been nominated to lead the Fed next year. Bernanke has served as chairman during some of the biggest financial challenges since the Depression. The former Princeton professor’s decisive actions and policies helped to avert a global economic meltdown during late 2000s fiscal crisis, and jump-started a still-moderate U.S. recovery. The American economy's "adult in the room" has said that there is only so much the Fed can do; politicians are the ones with the power to keep us from going over a fiscal cliff.
Saudi Arabia's aging monarch holds the keys to two of Islam's holiest mosques and the world's second largest crude oil deposit of 265 billion barrels, amounting to 20% of the world's reserves. The Kingdom boasts a $727 billion GDP, putting it among the top 20 richest countries worldwide. But with 12% of Saudi nationals without a job, including 25% of its under 25s, the king has pushed $130 billion at unemployment funds and housing projects in recent years.
As chief banker of the world's largest currency area -- the euro zone's collective GDP is now nearly $17 trillion -- Draghi faces the Herculean task of trying to maintain financial unity across 17 countries. But if anyone can wrangle the interests of nations as diverse as Germany and Greece, it might be the man who navigated the minefield of Italian politics so deftly that he earned himself the nickname "Super Mario."
Duke heads the world's No. 1 retailer ($470 billion in revenues in 2012) and biggest private employer (2.2 million employees). Wal-Mart can make or break a company simply by deciding to stock its products. Last year, Sweden's $785 billion-in-assets sovereign wealth fund (none bigger) dropped its Wal-Mart stock -- reportedly worth about $140 billion -- on advice from its Ethical Council that cited a "serious and systematic abuse of workers' rights."