JPMorgan Loses Bid to Dismiss Mortgage Suits
Federal agency filed suit against 16 banks
JPMorgan Chase & Co. (JPM) lost a bid to have a U.S. judge dismiss lawsuits filed by the Federal Housing Finance Agency against 16 U.S. banks over mortgage-backed securities.
JPMorgan, Bank of America Corp. and Citigroup Inc. (C) were among the lenders sued last year for allegedly misleading Fannie Mae and Freddie Mac about the soundness of loans underlying billions of dollars of residential mortgage-backed securities. JPMorgan served as the lead underwriter for 30 out of the 103 securitizations at issue in this case.
U.S. District Judge Denise Cote in Manhattan today rejected a bid to throw out the FHFA's complaint, overruling arguments that the agency lacked factual support that the loans underlying the securitizations weren't underwritten in accordance with the guidelines set out in the offering documents.