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Thu Feb 7, 2013, 12:47 PM

E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad

(And the beat goes on...gd)

When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix.

Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews, according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors.

The trove of internal e-mails and employee interviews, filed as part of a lawsuit by one of the investors in the securities, offers a fresh glimpse into Wall Streetís mortgage machine, which churned out billions of dollars of securities that later imploded. The documents reveal that JPMorgan, as well as two firms the bank acquired during the credit crisis, Washington Mutual and Bear Stearns, flouted quality controls and ignored problems, sometimes hiding them entirely, in a quest for profit.

The lawsuit, which was filed by Dexia, a Belgian-French bank, is being closely watched on Wall Street. After suffering significant losses, Dexia sued JPMorgan and its affiliates in 2012, claiming it had been duped into buying $1.6 billion of troubled mortgage-backed securities. The latest documents could provide a window into a $200 billion case that looms over the entire industry. In that lawsuit, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, has accused 17 banks of selling dubious mortgage securities to the two housing giants. At least 20 of the securities are also highlighted in the Dexia case, according to an analysis of court records.

http://dealbook.nytimes.com/2013/02/06/e-mails-imply-jpmorgan-knew-some-mortgage-deals-were-bad/?nl=todaysheadlines&emc=edit_th_20130207

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Reply E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad (Original post)
groovedaddy Feb 2013 OP
Sekhmets Daughter Feb 2013 #1
hollysmom Feb 2013 #2
Squinch Feb 2013 #3
RickFromMN Feb 2013 #4
Doctor_J Feb 2013 #5

Response to groovedaddy (Original post)

Thu Feb 7, 2013, 12:58 PM

1. This could be the long awaited reckoning! n/t

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Response to groovedaddy (Original post)

Thu Feb 7, 2013, 02:16 PM

2. was there ever any doubt?

How could a company who claimed to have such smart employees be so stupid?

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Response to groovedaddy (Original post)

Thu Feb 7, 2013, 04:47 PM

3. Shocked. Shocked, I tell you.

I always believed them when they said they didn't see it coming! I always assumed they were all just in a coma.

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Response to groovedaddy (Original post)

Thu Feb 7, 2013, 07:29 PM

4. I expect a big settlement where Dexia promises to destroy all evidence of wrongdoing.


I wish Dexia and other private plaintiffs were required to make their evidence available to governments for criminal prosecutions.

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Response to groovedaddy (Original post)

Fri Feb 8, 2013, 09:33 AM

5. Well, duh. These people aren't stupid

Corrupt, malevolent, evil - yes. Stupid - no.

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