WASHINGTON—The Justice Department's pursuit of possible criminal charges against J.P. Morgan Chase & Co. over the sale of mortgage securities is based in large part on information from a person inside the bank who is aiding the government, according to people familiar with the matter.

The cooperating person has provided information—including emails—suggesting the bank vastly overstated the quality of mortgages that were being bundled into securities and sold to investors before the financial crisis, the people said.

The documents and other material provided by the person have proved critical to the Justice Department's investigation and are fueling the government's aggressive push to elicit an admission of wrongdoing by J.P. Morgan as part of any settlement, these people said.

The general framework for a final deal is in place and the total being discussed is in the neighborhood of $11 billion, said a person briefed on the talks. Of that amount, $7 billion would be cash and $4 billion in relief J.P. Morgan would provide to consumers. The U.S. government, this person added, could pursue a higher total of cash and relief, but in that case the cash paid out by J.P. Morgan might drop lower than $7 billion while the relief portion rises.

Representatives of the New York-based bank have been adamant that no crimes were committed, and the government's push for an admission of wrongdoing has been a major sticking point in the talks, according to people familiar with the discussion.