NEW YORK: Trustees involved in JPMorgan Chase & Co’s proposed $4.5 billion settlement with investors in money-losing mortgage bonds accepted the bank’s offer on Friday for the vast majority of the trusts holding the securities.

The trustees rejected the deal for six of about 330 trusts included in the offer, according to a notice posted on a website run by the trustees.

Twenty seven trusts obtained an extension until Oct 1 for one or more loan groups.

JPMorgan reached the $4.5bn agreement in November with 21 institutional investors in 330 residential mortgage-backed securities trusts issued by JPMorgan and Bear Stearns, which the bank took over during the financial crisis. One of the trusts was later excluded from the deal.

The settlement would resolve claims over misrepresentations in the quality of mortgages packaged into securities before the collapse of the U.S. housing market.

The trustees, who included Bank of New York Mellon, Wells Fargo Bank and HSBC Bank USA faced a Aug. 1 deadline for a decision on whether to accept the offer.

JPMorgan does not have to go through with the $4.5bn deal if the number of trusts that reject the deal are in excess of a confidential limit the parties negotiated. Assuming it goes forward, the trustees will seek court approval for the trusts that accept the agreement.

Published in Dawn, August 3rd, 2014