DSNews The homepage of the servicing industry
A federal judge ruled on Wednesday that investors' claims in nine separate offerings for $10 billion worth of residential mortgage-backed securities (RMBS) were similar enough for the investors to proceed as a class in a lawsuit against JPMorgan Chase.
U.S. District Judge J. Paul Oetke's ruling clears the way for investors to proceed with a class-action suit against JPMorgan Chase, meaning that all the investors can be represented by a lead plaintiff in the case. Investors are accusing the bank of misleading them by making false statements regarding the RMBS when the securities were packaged and sold to the investors in 2007, a year before the subprime lending crisis.
The ruling applies only to the liability phase of the suit, Oetken said.
"Because the class is currently certified for liability purposes, this phase of litigation will focus on the issue of whether defendants made material false statements or omissions in the offering documents that affected the value of the certificates owned by the plaintiff class members," Oetken said.
This is not the first time JPMorgan Chase has come under fire over RMBS. In 2013, the bank agreed to a then-record $13 billion settlement with the government amid allegations that the bank sold faulty mortgage-backed securities leading up to the subprime crisis in 2008.
A spokesperson from JPMorgan Chase declined to comment on Oetken's ruling.
