Bank shares are weakening after the Massachusetts State Supreme Judicial Court upheld a decision that two foreclosures from U.S. Bancorp (NYSE: USB) and Wells Fargo (NYSE: WFC) were not valid because the banks did not properly show they held the mortgages at the time of the foreclosure.
As of 12:30 p.m. (EDT), USB and WFC shares are down 1.26 percent and 3.30 percent, respectively.
JPMorgan Chase & Co. (NYSE:JPM) is sinking 3.42 percent, while Bank of America Corp. (NYSE:BAC) is down 2.46 percent.
The broader Financial Select Sector SPDR ETF NYSE:XLF) has declined 1.78 percent.
The Judge in the Massachusetts case Justice Ralph D. Gants, wrote that the mortgages under question were actually transferred into two mortgage-backed trusts.
The ruling is feared to potentially impact similar foreclosures cases of other banks.