JPMorgan sued for $95 million

Posted Jan 3, 2012 by Owen Weldon
JPMorgan Chase & CO has been hit with a lawsuit. The company is being sued for a staggering $95 million for allegedly misrepresenting the underlying mortgage loans.
US Bank NA wants JPMorgan to buy back the mortgage loans because of warranties relating to the Bear Steams Asset Backed Securities Trust 2005-4, which is when the company served as trustee.
According to Reuters, JPMorgan Chase is also be accused of refusing to provide information about the underlying loan files, which are required as per the trust documents. This is so it can conduct an investigation to the extent of the alleged breaches.
According to Yahoo News, Jennifer Zuccarelli, a spokeswoman for JPMorgan Chase, said that she had no comment about the lawsuit.
The lawsuit was filed in Manhattan, in the New York Supreme Court on Friday. On Tuesday it was publicly docketed.
This is just one of the many lawsuits that are going around, which is meant to hold banks responsible for losses that investors suffered losses due to mortgages being toxic, not underwritten correctly or defective.
According to the Daily Gossip, JPMorgan Chase is not only dealing with this legal action. HSN Nordbank, a German Lender, has also sued Chase over losses in mortgage bond investments. HSN Nordbank also sued Ally Financial, Credit Suisse Securities and Barclays Capital Inc.
HSN Nordbank says that Ally Financial and Chase presented them with material misrepresentations and omissions about the mortgage bonds that backed them up. The court filing says that the materials understated the securities’ risk profile relating to the securities’ credit ratings.
JPMorgan may have to deal with a very urgent issue, if the company is faced with similar legal action. The company’s stock price changed by 6.5 percent in the past few months.