JPMorgan's $13 billion settlement to include deadline for assisting homeowners The government plans to impose a deadline for JPMorgan Chase to dole out consumer relief as part of a tentative $13 billion settlement, insisting the bank would face an additional penalty if the condition is not met, according to a person familiar with the negotiations. A final deal between the Justice Department and the nation's biggest bank could come as early as Tuesday, said the person, who was not authorized to speak publicly. Federal prosecutors have been working with JPMorgan for months to resolve allegations that the bank knowingly sold securities made up of low-quality mortgages in the lead-up to the financial crisis. As of last month, the bank has agreed to a deal that would include $4 billion in aid to consumers, with the remaining $9 billion paid out in fines. Now officials at Justice, the Department of Housing and Urban Development and JPMorgan have hashed out additional terms for the consumer portion of the agreement. A person familiar with the talks said at least $1.5 billion of consumer aid will go to reduce home-loan payments for borrowers whose mortgages are higher than the value of their homes, or under water. And $300 million must go toward other forms of forbearance, such as forgiving a portion of the loan until a later date to reduce payments now and increase the odds that borrowers will be able to remain in their homes. The other half of the money can be used for an array of restitution to help other borrowers or communities hard hit by the mortgage crisis. Among the options: JPMorgan could lower interest rates on existing loans, or it could originate new loans to low- and moderate-income borrowers loans it would be forbidden from selling to investors and forced to keep on its books to encourage responsible lending. Finally, in an unprecedented arrangement that has not been part of any previous agreement, the company could get credit for reducing blight by demolishing foreclosed homes or by absorbing the cost of mortgages on homes the company has not foreclosed on but has effectively abandoned. The final option is available only in areas with high rates of foreclosure and numbers of vacant homes. The company will have until the end of 2016 to comply with the agreement. If it fails to spend the entire $4 billion before that deadline, it would have to pay an amount equal to the unexpended funds either to the government or to a third-party designated by the government - such as a nonprofit organization that serves low-income homeowners.