JPMorgan Chase is getting mauled by Bear Stearns again.
The nation’s credit-union watchdog sued JPMorgan for a second time yesterday over $3.6 billion of Bear Stearns mortgage bonds that imploded in the wake of the financial crisis.
The suit brought by the National Credit Union Administration accuses Bear Stearns, the failed bank acquired by JPMorgan in 2008, of peddling toxic securities to four credit unions that later collapsed.
The same government agency sued JPMorgan last year over $1.4 billion in mortgage-backed securities that led to losses for credit unions. That suit is still pending.
In the latest complaint, the credit union regulator said Bear Stearns conspired with at least 16 outfits that cranked out toxic mortgages and securities sold to unsuspecting buyers.
Those included notorious subprime mortgage outfits such as Countrywide Financial, New Century and People’s Choice Home Loans.
Their substandard mortgages were repackaged into more than $3.6 billion of derivative securities with allegedly counterfeit triple-A credit ratings — and were sold by Bear Stearns to almost every credit union, according to the suit.
Bear Stearns also knew but concealed that as many as 74 percent of the toxic mortgages it handled would fail in less than a year, the suit claimed.
The 280-page complaint dredged up tales of alleged deception and chicanery — including doctored tax forms, as well as kickbacks and bribes related to everything from cars to breast implants — aimed at piling up new mortgages.
“If you had a pulse, we gave you a loan,” one disgraced mortgage officer is quoted as saying in the lawsuit.
JPMorgan Chase and its JP Morgan Securities, which were not accused of wrongdoing, were sued as the successor company of Bear Stearns. JPMorgan had no comment.
JPMorgan chief Jamie Dimon has openly complained that his bank faces as much as $10 billion in losses from Bear Stearns just for doing the Federal Reserve “a favor” by buying the collapsing investment bank during the economic meltdown.