JPMorgan $13B Deal May Not End Bank's Legal Woes The $13 billion settlement that JPMorgan Chase agreed to Tuesday is the largest ever between the Justice Department and a corporation. Yet it isn't likely the end of the bank's legal troubles over the risky mortgage securities it sold before the financial crisis. JPMorgan has several lawsuits pending against it and the mortgage businesses it bought from Bear Stearns and Washington Mutual in 2008. There's also an ongoing criminal investigation led by the office of U.S. Attorney Benjamin Wagner in Sacramento, Calif. The bank may be negotiating or litigating for years and has set aside $23 billion to cover those costs. Last month, in a filing with the Securities and Exchange Commission, it said it may need up to $5.7 billion more. In a conference call with investors Tuesday, JPMorgan's chief financial officer, Marianne Lake, said it was "too early" to discuss whether the bank would have to add to its legal reserves. "These things are never 'one and done,' and they'll likely be more civil charges," said Erik Oja, an equity analyst with Standard & Poor's who covers the U.S. banking industry. But, Oja added, "these sort of settlements really do help clear away most of the issues." The deal also included settlements with New York, California and other states. It was reached after months of negotiations and could serve as a template for similar settlements with other big banks. As part of the deal, JPMorgan agreed to provide $4 billion in relief to homeowners affected by the bad loans. The bank also acknowledged that it misrepresented the quality of its securities to investors. JPMorgan was among the major banks that sold securities that plunged in value when the housing market collapsed in 2006 and 2007. Those losses triggered a financial crisis that pushed the economy into the worst recession since the 1930s. "The conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown," Attorney General Eric Holder said. JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm's behavior. JPMorgan will pay $2 billion in civil penalties to the federal government and about $1 billion to New York state. An additional $6 billion will go toward compensating investors. In a statement, JPMorgan CEO Jamie Dimon said the settlement covers a "very significant portion" of the banks troubled mortgage-backed securities, as well as those it inherited when it purchased Bear Stearns and Washington Mutual in 2008. "We are pleased to have concluded this extensive agreement with the (government) and to have resolved the civil claims of the Department of Justice and others," Dimon said in the statement. The deal eclipses the record $4 billion levied on oil giant BP in January over the 2010 offshore oil spill, which was the worst in U.S. history. While the $13 billion that JPMorgan is paying is a staggering sum, it represents only about 60 percent of the bank's $21.3 billion net income reported for 2012. According to the Justice Department's statement of facts agreed to by JPMorgan, many of the mortgage loans were referred to inside JPMorgan as "rejects." Those loans were missing appraisals or proof of borrower's income, employment or assets.