JPMorgan may be nearing end of WaMu legal battle

by Ryan Smith08 Aug 2016
There may be a light at the end of the tunnel for JPMorgan Chase in its legal troubles over the acquisition of Washington Mutual’s banking operation.

JPMorgan has been in a legal battle over the acquisition with both the FDIC and Deutsche Bank. But that battle seems to be nearing an end, according to a HousingWire report.

The lawsuit was originally brought by Deutsche Bank against the FDIC and later amended to include JPMorgan. The suit asserted that Deutsche Bank deserved an estimated $6 billion to $10 billion in damages “based upon alleged breaches of certain representations and warranties given by certain Washington Mutual affiliates in connection with mortgage securitization agreements.”

Deutsche Bank claimed that JPMorgan Chase, by acquiring WaMu’s banking operations, may have assumed liability for those alleged misrepresentations, HousingWire reported. At first the big bank seemed to secure a win, when a court ruled in its favor on the question of whether the FDIC is responsible for WaMu repurchase obligations.

But the FDIC appealed that ruling, and the case has been stayed pending the outcome of the appeal, HousingWire reported.

But in a recent regulatory filing, JPMorgan said that it had signed a term sheet with the FDIC and Deutsche Bank to resolve the case.

The agreement is subject to FDIC approval, according to Bloomberg.
 

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