The New York based bank, JPMorgan & Chase Co. has agreed to settle with Federal Home Loan Bank of Pittsburgh to turn over the government’s draft complaint at the center of its $13 billion deal with regulators. Back in 2009, the Federal Home Loan Bank of Pittsburgh sued JPMorgan Chase and credit-ratings companies over losses on $1.8 billion in mortgage-backed securities it bought in 2006 and 2007. The bank said in court papers, the draft complaint could provide a more detailed account of the federal investigation and reveal the name of a JPMorgan employee who cooperated with the federal investigation.
The bank accused credit rating companies McGraw Hill Cos., and Moody’s Investors Services Inc. of assigning the highest possible ratings to mortgage-loan pools so that they could be sold to institutional investors while knowing the certificates were actually junk bonds, in their lawsuit. Bloomberg News has reported that the litigation with those two defendants is still continuing.
During the course of the litigation The Pittsburgh FHLB claimed it had discovered discrepancies by JPMorgan employees about material representations regarding borrowers’ reported incomes and the performance of certain income loan programs. Litigators for the Federal Home Loan Bank of Pittsburgh stated in Pennsylvania state court that they had come to an agreement, but without disclosing terms of the deal. JPMorgan Chase is the biggest U.S. lender by assets. A JPMorgan Chase spokesman, Brian Marchiony, declined to comment on the announced settlement.
Summary:
The New York based bank, JPMorgan & Chase Co. has agreed to settle with Federal Home Loan Bank of Pittsburgh to turn over the government’s draft complaint at the center of its $13 billion deal with regulators. Back in 2009, the Federal Home Loan Bank of Pittsburgh sued JPMorgan Chase and credit-ratings companies over losses on $1.8 billion in mortgage-backed securities it bought in 2006 and 2007.
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