Banks May Fight Banks as Mortgage Investors Pursue Class Status

Banks May Fight Banks as Mortgage Investors Pursue Class Status

Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and other banks may pay more to resolve claims over their alleged roles in the collapse of a $2.3 trillion mortgage- backed securities market if sophisticated investors are allowed to sue as a group along with less savvy ones.

Class-action status allows investors to pool financial and legal resources, giving them greater leverage to win larger settlements or verdicts. The banks, however, have a court ruling on their side that may help fend off such blockbuster cases. It says class status is barred because some investors are too sophisticated — in fact, because some of them are other banks, including JPMorgan.

“It is possible to be both an alleged perpetrator and victim at the same time,” said Jacob S. Frenkel, a former U.S. Securities and Exchange Commission lawyer now in private practice in Potomac, Maryland. “It’s unprecedented that you have the most sophisticated institutions as victims, to be in a position where their losses are so great that they have sued.”

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Comments
2 Responses to “Banks May Fight Banks as Mortgage Investors Pursue Class Status”
  1. Linda H says:

    Would the fact the investors suit (and winning) against the banks serves as evidence the bankster suing the homeowner regarding their mortgage was never securitized correctly; therefore, the bankster has no standing and cannot foreclose on the homeowner?

  2. Beth A. says:

    Let ’em eat each other alive….bankster stew.

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