Mortgage-Bond Ruling ‘Clear Negative’ for Banks, Analyst Says
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A court ruling favoring the Federal Home Loan Bank of Pittsburgh in its effort to make mortgage bond underwriters buy back bad debt was a “clear negative” for Wall Street and may prompt settlements in such cases, Compass Point Research and Trading LLC said.
The Nov. 29 decision by Pennsylvania state Judge R. Stanton Wettick Jr. allows a suit against JPMorgan Chase & Co. and three credit ratings companies to enter the so-called discovery phase, which may force the defendants to disclose information relevant to the case.