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Record #: O2014-77   
Type: Ordinance Status: Failed to Pass
Intro date: 1/15/2014 Current Controlling Legislative Body: Committee on Committees, Rules and Ethics
Final action: 5/20/2015
Title: Removal of JPMorgan Chase Bank as municipal depository
Sponsors: Hairston, Leslie A., Sawyer, Roderick T., Fioretti, Bob
Topic: FINANCE FUNDS - Depositories of City/School Funds
Attachments: 1. O2014-77.pdf
Related files: R2015-407
Committee on Finance

ORDINANCE


WHEREAS, on November 19, 2013, affiliates of JPMorgan Chase & Co. and the U.S. Justice Department reached a record $13 billion civil settlement related to JPMorgan's mortgage security business activities; and

WHEREAS, between 2005 and 2007, JPMorgan purchased loans for the purpose of packaging and selling residential mortgage-backed securities; and

WHEREAS, before purchasing loans from third parties, employees at JPMorgan conducted due diligence to confirm, among other things, that the loans complied with the originator's underwriting guidelines; and

WHEREAS, through that due diligence process, JPMorgan employees were infonned by due diligence vendors that a number of the loans included in at least some of the loan pools that it purchased, and subsequently securitized, did not comply with the originators' underwriting guidelines, and, in the vendor's judgment, did not have sufficient compensating factors, and that a number of the properties securing the loans had appraised values that were higher than the values derived in due diligence testing from automated valuation models, broker price opinions or other valuation due diligence methods; and

WHEREAS, JPMorgan represented to investors in various offering documents that loans in the securitized pools were originated generally in conformity with the loan originator's underwriting guidelines, and that exceptions were made based on compensating factors determined after careful consideration on a case-by-case basis; and

WHEREAS, the offering documents further represented, with respect to representations and warranties made to JPMorgan by sellers and originators of the loans, that JPMorgan would not include any loan in a pool being securitized if anything has come to JPMorgan's attention that would cause it to believe that the representations and warranties of a seller or originator would not be accurate and complete in all material respects; and

WHEREAS, notwithstanding these repr...

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