Wells Fargo (WFC) is jumping deeper into the MBS litigation fray by filing suit against EMC Mortgage, claiming the firm should buy back 800 toxic mortgages sold into the Bear Stearns Trust. Wells Fargo is suing in its capacity as trustee of the Bear Stearns Mortgage Funding Trust 2007-AR2. EMC Mortgage Corp. is now under the umbrella of JPMorgan Chase (JPM), which acquired the firm back in 2008. JPMorgan declined to comment on the case. In a suit filed with the Court of Chancery of the State of Delaware, Wells Fargo claims that under terms of a pooling and servicing agreement, EMC is required to buy back 800 of 2,000 loans sold into the Trust that do meet contractual obligations or underwriting standards. “EMC has rejected the trust’s repeated repurchase demands, in violation of its contractual obligation,” Wells Fargo wrote in its complaint. The suit claims 930 loans in the Trust were refinancings on existing mortgages. “For those 930 mortgage loans, the value of the property was based solely on the appraised value rather than a sale price,” Wells Fargo claims. Wells Fargo alleges that data shows 110 of the refinanced properties were sold later at prices far below the appraised values at refinancing. This is not the first time EMC’s underwriting on loans has come under fire. Earlier this year, a federal judge eased the burden of evidence that Syncora Guarantee (SCA) must meet as it attempts to compel EMC Mortgage Corp. to re-acquire toxic home equity lines of credit that Syncora is insuring under an agreement. Syncora filed the original suit against EMC Mortgage Corp. in 2009, alleging the mortgage servicer breached representations and warranties made to the insurer on 9,871 HELOCs residential mortgage loans. Write to Kerri Panchuk.