JPMorgan Sued by NY for Fraud Over Mortgage Securities
News from Businessweek:

JPMorgan Chase & Co. (JPM), the biggest U.S. bank, was sued by New York Attorney General Eric Schneiderman, who alleged that the Bear Stearns business the bank took over in 2008 defrauded mortgage-bond investors.

Investors were deceived about the defective loans backing securities they bought, leading to “monumental losses,” Schneiderman said in a complaint filed yesterday in New York State Supreme Court.

“Defendants systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans,” Schneiderman’s office said.

Schneiderman in January was named co-chairman of a state- federal group formed to investigate misconduct in bundling of mortgage loans into securities leading up to the financial crisis. The group includes officials from the U.S. Justice Department, the Securities and Exchange Commission, the FBI and other federal and state officials.

Joe Evangelisti, a JPMorgan spokesman, said the New York- based bank would contest the complaint, which is “entirely about” conduct by Bear Stea…………… continues on Businessweek

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Related News:

TEXT-Fitch affirms AIB Mortgage Bank’s covered bonds at ‘A’
News from Reuters:

Tue Oct 2, 2012 12:10pm EDT

Oct 2 - Fitch Ratings has affirmed AIB Mortgage Bank's (AIBMB) mortgage
covered securities (MCS) at 'A' with a Negative Outlook following a review of
the programme.

The total outstanding MCS equates to EUR11.19bn and all benefit from a 12-month
extendable maturity from their expected maturity dates. AIBMB is a wholly-owned
subsidiary of AIB Bank plc (AIB; 'BBB'/Negative/'F2') and a member of the AIB

The MCS's rating is based on AIB's Long-term Issuer Default Rating (IDR) of
'BBB' and a D-Cap of 1 (very high) and the overcollateralisation (OC) that Fitch
takes into account in it analysis, the combination of which enables the MCS to
be rated as high as 'BBB+' on a probability of default (PD) basis. As AIB is
rated 'F2' Fitch only gives credit to the voluntary public commitment in place
which currently stands at 52%. AIBMB confirmed to Fitch that they shortly intend
to increase the publicly committed level of OC to at least 54.2%. This is
sufficient to pass 'BBB+' stress scenarios, and provides for high recoveries
given default of the covered bonds in a 'A' scenario.

The D-Cap of 1 is driven by the very high risk assessment of the liquidity gap &
systemic risk component, which is the weakes...............      continues on Reuters

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