You can pause intro music down below.
Piggybankblog posted on 11/07/12
Cross linked with reuters.com
NEW YORK, Nov 5 (Reuters) – JPMorgan Chase & Co lost a bid on Monday to dismiss a U.S. regulator’s lawsuit accusing the bank of misleading Fannie Mae and Freddie Mac in their purchase of billions of dollars worth of risky mortgage securities.
U.S. District Judge Denise Cote in Manhattan pared down parts of the lawsuit filed by the Federal Housing Finance Agency but allowed other allegations in the case to move forward.
The case is one of hundreds of lawsuits filed by investors and regulators related to mortgage-backed securities, which were at the center of the 2008 financial crisis when they sank in value during the housing downturn. Cote’s ruling could have an impact on other lawsuits by the FHFA against banks that packaged mortgages and sold them to investors as securities.
The FHFA has accused JPMorgan of falsely representing that the mortgages underlying the securities followed underwriting standards as they applied to the quality of the loans.
A spokeswoman for JPMorgan did not immediately respond to a request for comment on the ruling. FHFA representatives also were not immediately available for comment.
The case was one of 17 lawsuits that the agency, as conservator for Fannie and Freddie, filed in September 2011 against Bank of America Corp, Citigroup Inc. and other banks.
The FHFA sued UBS AG in June 2011, contending that the bank misled Fannie Mae and Freddie Mac into buying $6.4 billion of subprime and other residential mortgage-backed securities. In May, Cote denied a motion to dismiss that case.
In the JPMorgan case, the FHFA said Fannie and Freddie had bought more than $33 billion in mortgage-backed securities sponsored or underwritten by the bank or two other companies it acquired, Bear Stearns & Co Inc and Washington Mutual Bank.
JPMorgan contended FHFA didn’t put forward enough facts to back its allegations that the loans weren’t underwritten properly. It also contended the lawsuit was filed too late.
But Cote on Monday ruled that FHFA’s allegations “amply support” its claim that the securitizations’ offering documents contained false statements.
The judge dismissed some of the agency’s claims. The FHFA had accused JPMorgan of fraud over statements in the offering documents on owner-occupancy rates and loan-to-value ratios for the mortgages supporting the securities.
Cote said the only basis for a fraud claim was a comparison between the figures in the offering documents and the results of an analysis the FHFA conducted. The judge said the analysis wasn’t enough to support the allegation.
The case is Federal Housing Finance Agency v. JPMorgan Chase& Co., U.S. District Court for the Southern District of New York, 11cv06188
My name is John Wright AND I AM FIGHTING BACK!
All Rise! The Honorable Judge Wright has left The Courtroom of Public Opinion!
Your donation makes a difference in my life.
PRIVACY NOTICE: Warning – any person and/or institution and/or Agent and/or Agency of any governmental structure including but not limited to the United States Federal Government also using or monitoring/using this website or any of its associated websites, you do NOT have my permission to utilize any of my profile information nor any of the content contained herein including, but not limited to my photos, and/or the comments made about my photos or any other “picture” art posted on my profile.
You are hereby notified that you are strictly prohibited from disclosing, copying, distributing, disseminating, or taking any other action against me with regard to this profile and the contents herein. The foregoing prohibitions also apply to your employee , agent , student or any personnel under your direction or control.
The contents of this profile are private and legally privileged and confidential information, and the violation of my personal privacy is punishable by law. UCC 1-103 1-308 ALL RIGHTS RESERVED WITHOUT PREJUDICE