JP Morgan Facing $1.9 Billion Suit of Mortgage-Backed Securities

A New York appellate court said that JP Morgan Chase bank guaranteed information that later turned out to be inaccurate in mortgage-backed securities trusts. The court affirmed that a November 2013 lower court ruling allowed investors to pursue claims against GE Capital Corp, subsidiary WMC Mortgage LLC, which originated loans in the pool and JP Morgan subsidiaries that purchased the loans and pooled them into a trust. JP Morgan Mortgage Acquisition Corp appealed the ruling but was denied. The opinion stated “JPMMAC warranted against the existence of any material misstatement during the warranty period, no matter when the misstatements first appeared on the Mortgage Loan Schedule or loan tape. BNOY Mellon Corp brought the claims in February 2013 on behalf of investors as the administrator for the trust after many of the mortgage loans became delinquent. The corporation claimed they had suffered $650 million in damages from losses in the trust that the Public Securities Corporation required JPMMAC to repurchase any faulty loans. The appellate court on Tuesday rejected JP Morgan’s argument that the language in the PSA warranting the information about specific loans provided by WMC only applied if the information became inaccurate during the limited time period when the deal was closing in 2006. If you believe you have lost money due to the negligence or fraud on the part of your broker dealer, please contact Stoltmann Law Offices for a free consultation. There is no obligation on any cases.

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