JPMorgan Chase has agreed to a $50.4 million settlement with the Justice Department for robo-signing documents sent to homeowners in bankruptcy and for related abuses.

Though JPMorgan in 2012 joined in a $25 billion national mortgage settlement of allegations that it robo-signed foreclosure documents, the Justice Department's U.S. Trustee Program found the practice continued for borrowers in bankruptcy.

During a two-year period that ended in late 2013, JPMorgan sent about 50,000 notices of payment changes to borrowers in bankruptcy that were robo-signed by people who could not verify their accuracy, the trustee program said in a press release. The New York bank also failed to file timely, accurate notices of escrow statements and mortgage payment changes with 25,000 homeowners in bankruptcy. Almost all of the restitution will be in refunds and credits.

JPMorgan Chase challenged Justice's characterization of its practices as robo-signing because, the company said in an email, a JPMorgan employee verified the accuracy of payment-change notices sent to homeowners in bankruptcy. However, JPMorgan "ran into logistical challenges" and relied on third-party vendors to electronically sign and file the documents with bankruptcy courts, the email said.

The bank will pay $22.4 million in credits and second-lien forgiveness to about 400 borrowers who were hit with excessive payment increases during their bankruptcy cases. Another $10.8 million will pay for payment increases and decreases that were not communicated in a timely manner with the homeowner or with bankruptcy courts.

Another $9.7 million will be paid to about 30,000 borrowers in bankruptcy who did not receive accurate or timely escrow statements or whose escrow payments were applied inconsistently.

Finally, the bank agreed to contribute $7.5 million to the American Bankruptcy Institute's endowment for financial education and support for the Credit Abuse Resistance Education Program.

An independent reviewer will verify and file public reports to ensure compliance. The bank agreed to make changes to its technology policies, procedures and internal controls to ensure the problems identified in the settlement do not happen again.

The U.S. Trustee Program is the arm of the Justice Department that administers bankruptcy proceedings.

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