Indirect Litigation Trade

Although ESM is not always a direct party to litigation, they closely follow any litigation that involves non-agency RMBS.

There has been a significant ongoing litigation that involves several trusts that were organized by JP Morgan. This litigation is at its end-stage, and, at this point, there are minor court rulings coming out. The court rulings involve the timing as well as the amount of the settlement that needs to be paid out to each trust by JP Morgan. ESM is constantly looking at these bonds when they are offered into the market.

In January 2020, the court made a ruling that impacted the payout on several of the mortgage bonds involved in the litigation. The court ruling was somewhat difficult to understand for those not familiar with the entire case.