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 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 $4.5 billion 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 <BK.N>, Wells
Fargo Bank [WFC.UL] and HSBC Bank USA [HBABU.UL] faced a Aug. 1
deadline for a decision on whether to accept the offer.
JPMorgan does not have to go through with the $4.5 billion 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.
"We are pleased that the Trustees have accepted the settlement for
so many trusts," said Robert Madden, a lawyer with Gibbs & Bruns,
the Houston law firm that represents the institutional investors who
struck the deal.
He said the deal offers "enormous benefits."
"We believe the acceptance by the Trustees of the overwhelming
majority of the 330 trusts is a significant step toward finalizing
the settlement", a JPMorgan spokeswoman said in a statement.
Representatives of the trustees declined to comment or did not
respond to requests for comment.
In a July 17 report, an expert for the trustees, Daniel Fischel,
recommended that the proposed settlement be accepted for 314 trusts
and that the trustees consider rejecting the settlement for 16
trusts.
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The expert said that before rejecting the proposed settlement for
any trust, the trustee should be confident a group of investors is
willing to pursue claims.
The 21 investors who agreed to the deal in November include
BlackRock Inc, Metlife Inc <MET.N>, Allianz SE's Pacific Investment
Management Company <ALVG.DE>, the TCW Group and Bayerische
Landesbank [BAYLN.UL].
The settlement does not include trusts issued by Washington Mutual,
which JPMorgan also acquired.
The offer was announced last year just before JPMorgan reached a $13
billion settlement with U.S. government authorities over defective
mortgages packed into securities before the 2008 financial crisis.
Bank of America Corp <BAC.N> reached a similar deal with an investor
group in June 2011. The bank agreed to pay $8.5 billion to resolve
claims by investors in securities issued by Countrywide Financial
Corp, which Bank of America acquired in 2008. A New York judge
largely approved that deal in January, although appeals are pending.
(Reporting by Karen Freifeld; Editing by Lisa Shumaker)
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