JPMorgan shells out another $614M to resolve litigation. JPMorgan ( JPM) will pay $614M to settle allegations that it violated the False Claims Act by "knowingly originating and underwriting non-compliant mortgage loans" for insurance coverage by the FHA and Department of Veteran's Affairs. As part of the deal, JPMorgan has admitted that it approved thousands of loans that weren't eligible for FHA/VA insurance over more than a decade and that it failed to inform the agencies when it "discovered more than 500 defective loans that never should have been submitted."

"Beginning as early as 2002, JPMC falsely certified that loans it originated and underwrote were qualified for FHA and VA insurance and guarantees. As a consequence of JPMC’s misrepresentations, both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses."

Morgan Stanley resolves MBS litigation for $1.25B. Morgan Stanley ( MS) has agreed to pay $1.25B to resolve litigation that Fannie Mae ( OTCQB:FNMA) and Freddie Mac ( OTCQB:FMCC) brought against the bank over the sale of mortgage-backed securities. Morgan Stanley will take a charge of $150M to boost its legal reserves in connection with the settlement, which will reduce Q4 EPS by $0.05 vs. a previously reported $0.50 excluding special items.