Unwitting Investors Duped Into Buying Crappy Mortgage Paper Make Gains In Effort To Obtain Documents Proving Bankster Fraud & Enforce Buyback Demands

Reuters reports:

• U.S. banks may be turning on one another in the legal battle over losses on mortgage-backed bonds. Big pension funds and other investors are demanding compensation from banks that sold them supposedly low-risk mortgage-backed bonds that disintegrated in the housing crisis, a fight that ultimately could cost Wall Street $100 billion or more.

• One big legal obstacle for investors has been getting documents they say will prove those bonds were anything but low-risk. Demands for documents have to come from the trustees who administer the bonds, and until recently trustees have stayed out of the legal fray.

• That may be changing. A recent Delaware lawsuit illustrates the increased aggressiveness of trustees in helping investors make their case. An attorney for one trustee, Wells Fargo & Co, spent a year pursuing documents from EMC Mortgage Corp, a unit of JPMorgan Chase & Co.

• Court documents show EMC, which JPMorgan inherited as part of its shotgun acquisition of Bear Stearns in 2008, faces several other requests from trustees, including Citigroup Inc. The lawsuit is among the first of its kind by a trustee, partly because investors have only recently organized themselves in large enough numbers to force trustees to consider their demands.

For more, see Mortgage bondholders gain key ally in putback fight.