JPMorgan to pay $5bn in FHFA deal JPMorgan Chase agreed to pay $5.1bn in a deal with a government housing regulator, resolving a large part of the allegations that it mis-sold mortgage-backed securities in the run-up to the financial crisis. The announcement by the Federal Housing Finance Agency on Friday ends one part of protracted legal negotiations that are expected to see the largest US bank by assets pay $13bn to the US government. Edward DeMarco, acting director of the FHFA, said: "This is a significant step as the government and JPMorgan Chase move to address outstanding mortgage-related issues." JPMorgan celebrated an "important step towards a broader resolution of the firm's MBS-related matters." Some $4bn will be paid by JPMorgan to settle the MBS allegations and a separate $1.1bn is destined for government-backed mortgage companies to settle claims that home loans, rather than securities, breached underwriting standards. Still outstanding is a final deal on the remainder of the bill of about $8bn. One issue is the extent to which JPMorgan can try to pass on its costs to another government agency, the Federal Deposit Insurance Corporation. The FDIC is the agency charged with winding down failing banks. In the case of Washington Mutual, which failed during the crisis, the FDIC brokered the sale of the good assets to JPMorgan while bad assets were placed into receivership. Many of the toxic MBS under investigation by US authorities were written by WaMu or Bear Stearns, another crisis-era acquisition by JPMorgan, rather than the bank itself. This has stoked controversy on Wall Street about whether the Department of Justice and other agencies are right to try to make JPMorgan foot the bill for the companies it acquired. The agreement between the FHFA and the bank specifies that JPMorgan cannot "seek indemnification, contribution, or recovery" from the FDIC "in its corporate capacity." However, one person familiar with the matter said that might not stop the bank trying to foist some of the cost on the WaMu receivership managed by the FDIC. The question of the FDIC's exposure is also at stake in a separate settlement with a government task force, led by the Department of Justice, according to people familiar with the matter. The FHFA is continuing to press for multibillion-dollar settlements with other banks, ranging from Goldman Sachs to Deutsche Bank, which are struggling to fight the cases in court. Philippe Selendy, partner at Quinn Emanuel Urquhart & Sullivan, and the FHFA's lead lawyer, said: "We will be resolute in pursuing FHFA's claims against the defendants in our 11 remaining cases."