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Investors Want Repurchase Assessment of $95B in JPMorgan Securities

""JPMorgan Chase"":http://www.jpmorganchase.com may soon be hit with a barrage of mortgage repurchase demands from investors, largely stemming from the lender's acquisitions of Washington Mutual and Bear Stearns.


The Houston, Texas-based law firm of ""Gibbs & Bruns LLP"":http://www.gibbsbruns.com says its clients have issued instructions to the trustees of $95 billion in residential mortgage-backed securities (RMBS) issued by JPMorgan â€" including BNY Mellon, U.S. Bank, Wells Fargo, Citibank, and HSBC â€" to open investigations to determine if the mortgage bonds are secured by ineligible loans.

Collectively, Gibbs & Bruns' institutional investor clients hold over 25 percent of the voting rights in 243 trusts that issued the RMBS in question.


""Our clients continue to seek a comprehensive solution to the problems of ineligible mortgages in RMBS pools and deficient servicing of those loans. Today's action is another step toward achieving that goal,"" said Kathy D. Patrick of Gibbs & Bruns LLP, lead counsel for the investors.

Gibbs & Bruns negotiated the $8.5 billion settlement between Bank of America and RMBS trustee BNY Mellon on behalf of a group of institutional mortgage investors.

Approval of the BofA settlement is currently pending in federal court and has been challenged by investors in the securities trusts who say they were excluded from the negotiation talks.

According to _American Banker_, JPMorgan Chase has been preparing for an increase in mortgage repurchase requests recently.

The paper cites CEO Jamie Dimon as telling investors at a Goldman Sachs conference in early December, ""We've been sued at [over] $54 billion of securities. We expect that number to go up … We've hired top lawyers … top mortgage people, to make sure we understand exactly the exposure.""

In response to the Gibbs & Bruns announcement, Kristin Lemkau, spokesperson for JPMorgan, told DSNews.com, “We will honor our obligation to repurchase any loan that should be repurchased under the terms of those agreements.”

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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