Schneiderman says JPMorgan ignored the work of third-party due diligence companies, which was also a claim that the FHFA made. And Schneiderman actually cites the FHFA’s own sampling of mortgages to determine the quality of the pools—or, rather, the lack of quality.
After the FHFA lawsuits were filed last year, Felix Salmon and Nick Rizzo at Reuters scored them and produced a half-joking league table of banks. JPMorgan topped the list.
But that was actually a bit misleading. The reason JPMorgan beat out Bank of America is that the claims against Bank of America, Countrywide and Merrill Lynch were broken into three different lawsuits. Combined Bank of America would have taken the “lead” in the table.
I would not expect all 17 of the banks sued by the FHFA to also be hit with Schneiderman lawsuits. Most likely, only the worst of the bunch will be sued. One way of determining who “the worst” might be would be to draw up a list of which firms the FHFA sued for punitive damages.
Here’s that list: JPMorgan, Bank of America, Goldman Sachs, Morgan Stanley, Ally, and General Electric.*
(We can probably take Ally off Schneiderman's target list, since its mortgage unit is in bankruptcy.)
Draw your own conclusions.
- by CNBC.com senior editor John Carney
* GE maintains a minority ownership in CNBC's corporate parent, NBC Universal.
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