U.S. officials may want to extract a London Whale-size legal settlement from JPMorgan Chase.

The Federal Housing Finance Agency wants JPMorgan, the biggest U.S. bank by assets, to pay more than $6 billion to settle claims that it knowingly sold bad mortgages to Fannie Mae and Freddie Mac ahead of the financial crisis, the Financial Times reported on Tuesday, citing people familiar with the matter.

Such a settlement would be the biggest single penalty paid by any bank for actions ahead of the crisis. It would also roughly match the $6.2 billion JPMorgan lost in the "London Whale" trading debacle in early 2012.

The FHFA, which regulates Fannie and Freddie, claims that JPMorgan misled the government-backed mortgage agencies about the value of $33 billion in mortgage-backed securities it sold to them ahead of the crisis. Those securities eventually went bad, costing Fannie and Freddie billions.

JPMorgan expects to pay billions to settle the case, but is balking at the $6 billion price tag

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