MassMutual Sues Impac Over $16M In 'Junk' MBS

Law360, New York (May 6, 2011, 7:47 PM EDT) -- Massachusetts Mutual Life Insurance Co. accused Impac Funding Corp. on Friday in Massachusetts of failing to reveal that more than $16 million in mortgage-backed securities were underwritten by bad loans.

Impac, which originated and securitized the mortgage loans, sold the mortgage-backed securities to MassMutual by  claiming it had cautious underwriting standards, the suit said. In fact, Impac issued loans regardless of borrowers' ability to repay them, according to MassMutual, which also named JPMorgan Chase & Co. as a defendant.

“To take advantage of the exploding market...
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