* Suits allege JPMorgan misrepresentations, violations
* More banks face legal action on foreclosures, securities
* Ally Financial, PNC also make disclosures Tuesday
* 'Enormous damages' -Cambridge Place lawyer
By Jonathan Spicer and Tom Hals
NEW YORK/WILMINGTON, Delaware (Reuters) - Lawsuits
against banks over their mortgage lending and foreclosure
practices continue to pile up, with JPMorgan, PNC Financial
Services and Ally Financial disclosing suits on Tuesday.
JPMorgan Chase & Co faces two possible class action
lawsuits related to foreclosures, the No. 2 U.S. bank said in a
The suits allege "common law fraud and misrepresentation,
as well as violations of state consumer fraud statutes,"
JPMorgan said in the Securities and Exchange Commission filing,
without disclosing who filed them.
Banks, under investigation by state and federal officials
for sloppy or even fraudulent foreclosure paperwork, face suits
from both borrowers and investors in mortgage-backed
Ally Financial Inc said it has been sued by hedge fund
Cambridge Place Investment Management, which has ramped up a
legal scrap with Wall Street to recoup money lost on subprime
PNC Financial Services Group said it had been sued by the
Federal Home Loan Bank of Chicago, alleging misrepresentations
and omissions in connection with the sale of mortgage-backed
Goldman Sachs Group Inc, meanwhile, is reviewing the
practices of its Litton Loan Servicing unit and has temporarily
suspended evictions and foreclosures in several states,
according to a regulatory filing on Tuesday.
Bank of America, JPMorgan and Ally's GMAC Mortgage
voluntarily imposed brief moratoriums on foreclosures to review
their practices but have begun to resume evictions of
U.S. attorneys general for all 50 states are jointly
investigating whether banks failed to review documents properly
or submitted false information to evict delinquent borrowers.
JPMorgan said in Tuesday's quarterly SEC filing, that it
believes the information it provided about the foreclosures was
Since September, at least two lawsuits seeking class action
status have named JPMorgan in federal court for the Northern
District of Illinois: one by a Chicago homeowner claiming Wall
Street banks were acting together to illegally foreclose on
homes, and another by Kentucky homeowners seeking class action
status for having home equity lines cut.
It was unclear whether either of these were referred to in
the SEC filing. JPMorgan did not respond to requests for
information on the lawsuits.
The KBW index of bank stocks was down 1.3 percent in
afternoon trading. JPMorgan shares slipped 0.9 percent, PNC
shares were off 1.9 percent and Goldman Sachs fell 0.8
JPMorgan also acknowledged it faced suits related to
mortgage-backed securities brought by Cambridge Place and
brokerage Charles Schwab Corp.
Schwab is also among those bond investors that are suing
Citigroup Inc, which, with Bank of America, last week disclosed
suits related to mortgage underwriting.
"There is a lot of damage from investors buying RMBS
(residential mortgage-backed securities) from investment banks
in '05, '06 and '07," said Gerald Silk, a partner at Bernstein
Litowitz Berger & Grossmann LLP, who filed the Cambridge Place
lawsuit in Massachusetts.
"Enormous damages were sustained from those vintages of
RMBS," he said.
JPMorgan added that it was the parent defendant in "nine
separate individual actions filed by the Federal Home Loan
Banks of Pittsburgh, Seattle, San Francisco, Chicago and
Indianapolis in various state courts around the country."
In October, the Federal Home Loan Bank of Chicago sued
several banks over $3.3 billion of mortgage-backed securities
it had purchased. PNC said in a filing it is being sued over
$345 million of the securities, sold by National City, which
was acquired by PNC in December 2008.
Also on Tuesday, Ally said it has been named in six
mortgage bond-related lawsuits filed by investors including
Cambridge place, Charles Schwab, and the Federal Home Loan
Banks of Chicago and Indianapolis.
MBIA Insurance Corp also filed two lawsuits against Ally
over mortgage bonds, Ally disclosed in an SEC filing.
(Reporting by Jonathan Spicer, Maria Aspan and Helen Kearney
in New York, and Tom Hals in Wilmington, Delaware; Editing by
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