On Wednesday, January 21, 2009, a shareholder in mortgage backed securities of JP Morgan Acceptance has filed a proposed class action lawsuit in the United States District Court for the Eastern District of New York on behalf of purchasers of Mortgage Pass-Through Certificates and Asset-Backed Pass-Through Certificates of J.P. Morgan Acceptance Corporation I pursuant and/or traceable to false and misleading Registration Statements and Prospectus Supplements issued between January 2006 and March 2007 by JP Morgan Acceptance.
The class action lawsuit includes purchasers of Certificates in the following trusts:
J.P. Morgan Alternative Loan Trust 2006-A1, J.P. Morgan Alternative Loan Trust 2006-A2, J.P. Morgan Alternative Loan Trust 2006-A3, J.P. Morgan Alternative Loan Trust 2006-A4, J.P. Morgan Alternative Loan Trust 2006-A5, J.P. Morgan Alternative Loan Trust 2006-A6, J.P. Morgan Mortgage Acquisition Trust 2006-A4, J.P. Morgan Mortgage Acquisition Trust 2006-A6, J.P. Morgan Mortgage Acquisition Trust 2006-ACC1, J.P. Morgan Mortgage Acquisition Trust 2006-HE2, J.P. Morgan Mortgage Acquisition Trust 2006-NC1, J.P. Morgan Mortgage Acquisition Trust 2006-S2, J.P. Morgan Mortgage Acquisition Trust 2006-WMC2, J.P. Morgan Mortgage Acquisition Trust 2006-WMC4, J.P. Morgan Mortgage Acquisition Trust 2007-A2, J.P. Morgan Mortgage Acquisition Trust 2007-CH2, J.P. Morgan Alternative Loan Trust 2006-A7, J.P. Morgan Alternative Loan Trust 2006-S1, J.P. Morgan Alternative Loan Trust 2006-S2, J.P. Morgan Alternative Loan Trust 2006-S3, J.P. Morgan Alternative Loan Trust 2006-S4, J.P. Morgan Mortgage Acquisition Trust 2006-A3, J.P. Morgan Mortgage Acquisition Trust 2006-A5, J.P. Morgan Mortgage Acquisition Trust 2006-A7, J.P. Morgan Mortgage Acquisition Trust 2006-CH2, J.P. Morgan Mortgage Acquisition Trust 2006-HE3, J.P. Morgan Mortgage Acquisition Trust 2006-RM1, J.P. Morgan Mortgage Acquisition Trust 2006-WF1, J.P. Morgan Mortgage Acquisition Trust 2006-WMC3, J.P. Morgan Mortgage Acquisition Trust 2007-A1, J.P. Morgan Mortgage Acquisition Trust 2007-CH1, J.P. Morgan Mortgage Acquisition Trust 2007-S1

According to the complaint the plaintiff alleges that J.P. Morgan Acceptance Corporation I (“JP Morgan Acceptance”), certain of its officers and directors and the issuers and underwriters of the Certificates violated the Securities Act of 1933. The complaint alleges that on July 29, 2005 and February 8, 2006, JP Morgan Acceptance and the Defendant Issuers caused Registration Statements to be filed with the Securities and Exchange Commission (“SEC”) in connection with the issuance of billions of dollars of Certificates. The Certificates were issued pursuant to Prospectus Supplements, each of which was incorporated into the Registration Statements. The Certificates included several classes or tranches, which had various priorities of payment, exposure to default, interest payment provisions and/or levels of seniority. The Certificates were supported by large pools of mortgage loans. The Registration Statements represented that the mortgage pools would primarily consist of loan groups generally secured by first liens on residential properties, including conventional, adjustable rate and negative amortization mortgage loans.

The complaint alleges that the Registration Statements omitted and/or misrepresented the fact that the sellers of the underlying mortgages to JP Morgan Acceptance were issuing many of the mortgage loans to borrowers. According to the complaint, by the summer of 2007, the amount of uncollectible mortgage loans securing the Certificates began to be revealed to the public. To avoid scrutiny for their own involvement in the sale of the Certificates, the Rating Agencies began to put negative watch labels on many Certificate classes, ultimately downgrading many. The delinquency and foreclosure rates of the mortgage loans securing the Certificates has grown both faster and in greater quantity than what would be expected for mortgage loans of the types described in the Prospectus Supplements. As an additional result, the Certificates are no longer marketable at prices anywhere near the price paid by plaintiffs and the Class and the holders of the Certificates are exposed to much more risk with respect to both the timing and absolute cash flow to be received than the Registration Statements/Prospectus Supplements represented.