JP Morgan has reached a $614 million settlement with a raft of US government departments to resolve claims relating to the bank’s involvement in federal mortgage insurance programmes.

JP Morgan has reached a $614 million settlement with a raft of US government departments to resolve claims relating to the bank’s involvement in federal mortgage insurance programmes, the US banking firm said yesterday.

The bank has settled with the US Attorney's Office for the Southern District of New York, the Federal Housing Administration, the US Department of Housing and Urban Development  and the US Department of Veterans Affairs, it said in a statement.

“The settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it,” it said.

The bank said it will pay $614 million in cash and agree to enhance its quality control programme for loans that are submitted in the future to FHA's Direct Endorsement Lender programme. This settlement also releases it from False Claims Act, FIRREA and other civil and administrative liability for FHA and VA insurance claims that have been paid to JP Morgan since 2002 through the date of the settlement.

“The company believes it is fully reserved for the settlement, and any financial impact related to exposure on future claims is not expected to be significant,” it said.