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What's a week in mortgage banking without a new lawsuit? The latest litigation comes from Ambac Financial Group Inc., which has filed a lawsuit against JPMorgan Chase & Co. to recover losses from mortgage-backed securities (MBS) made by the former Bear Stearns Cos.

According to a Reuters news report, Ambac lost more than $200 million in claims from seven residential MBS issued by Bear Stearns, which was purchased by JPMorgan Chase in 2008.

"Driven by management's 'Bear don't care' mentality, Bear Stearns perpetrated a massive fraud that deceived investors and financial guarantors, such as Ambac, into believing that the mortgage loans backing its securitizations were originated pursuant to established underwriting guidelines and were therefore of good quality," Ambac said in its lawsuit, which was filed in New York State Supreme Court.

The lawsuit is the second that Ambac has brought against JPMorgan Chase regarding MBS-related losses.


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