Housing shouldn’t look at any color but the color of money

Housing shouldn’t look at any color but the color of money

People with bad credit and bad habits should be squeezed out of housing

Who is Nat Hardwick?

Former LandCastle Title CEO owns NASCAR team, rubs elbows with PGA pros

Lawsuit alleges former LandCastle Title CEO embezzled $30 million

Nat Hardwick allegedly used funds for private jets, gambling
W S
Investments

NY court keeps FHFA case against JPMorgan alive

JPMorgan Chase (JPM) failed to obtain dismissal of a major securities fraud suit filed by the Federal Housing Finance Agency.

The suit is one of 17 cases that the FHFA filed against major banking institutions for their respective roles in the offering and selling of mortgage-backed securities to Fannie Mae and Freddie Mac. The case centers around allegations that those transactions eventually led to steep losses at the GSEs due to insufficient underwriting standards and a failure to accurately represent the quality of the underlying mortgages. 

While JPMorgan saw a few claims dismissed, the case in its entirety was saved and is expected to move forward.

This means the banking giant is still on the hook for its role in the selling of $33 billion in RMBS to Fannie Mae and Freddie Mac through affiliated entities. However, it's not the only financial firm battling with FHFA in court.

UBS (UBS) and multiple other banks face the same allegations from FHFA. UBS was the first defendant to attempt a case dismissal and saw its motion for dimissal denied this past summer.

This week, Judge Cote refused to accept JPMorgan's argument that the FHFA did not present enough factual evidence to support allegations that the bank misrepresented the quality of loans tied to mortgage bonds.

JPMorgan also argued some of the FHFA claims are time barred under a federal statute, but the court disagreed with that assessment and kept the allegations alive.

Finally, JPMorgan tried to allege the FHFA failed to show the bank knowingly misrepresented the loans, but the judge disagreed with that assertion as well. 

kpanchuk@housingwire.com

Recent Articles by Kerri Panchuk

Comments powered by Disqus