Freddie, JPMorgan in Dispute Over Bad WaMu Loans | WHAT REALLY HAPPENED

Freddie, JPMorgan in Dispute Over Bad WaMu Loans

JPMorgan, which took over Washington Mutual's assets after the thrift collapsed, told Freddie it won't buy back mortgages sold by WaMu that failed to match promises made about their quality, McLean, Virginia-based Freddie said today in a regulatory filing.

This is an astonishing development for the legal puds at JP Morgan Chase to have invented. Here, JP Morgan Chase is entirely ignoring long established legal precedent.

When you buy a company (JP Morgan bought WAMU at a very steep discount due to the financial distress of the company) or when you buy any asset of a company, your purchase burdens you with all the legal obligations of that company or that asset.

For JP Morgan Chase to assert otherwise should be cause enough for their own credit rating to fall right off the table. JP Morgan Chase is in effect defaulting on its financial obligations with this legal stance.

Lawyers can argue anything they want, but when the financial obligations of a company aren't being met, credit rating agencies cannot ignore what the lawyers are in effect saying by what they are doing.

And JP Morgan Chase in this instance is not paying its bills.