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FHFA demands $6bn from big bank for mortgage fiasco

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Mortgage Professional America | 29 Aug 2013, 03:28 AM Agree 0
The U.S. government is demanding at least $6bn from JPMorgan Chase to settle lawsuits over the subprime mortgage fiasco
  • Wm Matz | | 29 Aug 2013, 09:57 AM Agree 0
    What incredible irony! JPMorgan developed the derivatives model [read Gillian Tett's Fools' Gold for details]. But their own risk quant, Krishna Varikooty, warned against using the model with home mortgages due to lack of sufficient performance data. As a result, JPM Chase did far less of the derivatives than the others. Now their model comes back to bite them, vicariously through the acquisitions of the Bear Stearns and WaMu trash.

    By the way, no one yet has been able to document exactly which WaMu mortgages JPMC bought from the FDIC. In a recent CA appellate case involving an old WaMu mortgage, the Chase attorney was asked by a justice who actually owned the mortgage; his incredible answer was, "Your honor, we don't know."
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