Now that’s what you call a HIGH PERCENTAGE of “clear defects”!

REUTERS-

JPMorgan Chase & Co (JPM.N) was sued by Wells Fargo & Co (WFC.N), which seeks to force it to buy back more than 800 soured mortgage loans that it oversees as trustee.

In a complaint made public on Wednesday in the Delaware Chancery Court, Wells Fargo accused JPMorgan’s EMC Mortgage LLC unit of refusing its demands that EMC buy back the loans, which were contained in Bear Stearns Mortgage Funding Trust 2007-AR2.

JPMorgan bought Bear Stearns and its EMC unit in 2008.

[REUTERS]

One by one these will soon all come out…

Fraction of an Excerpt from BLOOMBERG:

Richard M. Bowen, former chief underwriter for Citigroup’s consumer-lending group, said he warned his superiors of concerns that some types of loans in securities didn’t conform with representations and warranties in 2006 and 2007.

“In mid-2006, I discovered that over 60 percent of these mortgages purchased and sold were defective,” Bowen testified on April 7 before the Financial Crisis Inquiry Commission created by Congress. “Defective mortgages increased during 2007 to over 80 percent of production.”

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“The potential for owners to challenge lenders on foreclosure improprieties certainly is there,” Pallotta said. “Even if it turns out that the banks were right in 99 percent of these foreclosures, the additional diligence on their part, going forward, is going to cost them more money.”

The litigation over buybacks, also known as putbacks, can also pit big banks against each other. Last month, Deutsche Bank AG, acting as a trustee, refiled a lawsuit over misrepresented mortgages in $34 billion of Washington Mutual Inc. mortgage securities, with $165 billion in original balances.

The new suit in the U.S. District Court for the District of Columbia included JPMorgan as a defendant, after the Federal Deposit Insurance Corp. said that JPMorgan was wrongly claiming its insurance fund had agreed to cover the liabilities, according to the amended complaint.

Continue reading…BLOOMBERG

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