U. S Bancorp & Wells Fargo and company faced a severe setback in terms of mortgage foreclosure as they lost a case of foreclosure in the highest court of Massachusets which is likely to have its influence on the clash between the banking practices and state real estate law. The judgment had its impact on the bank stocks as it went down. The state’s Supreme Judicial Court maintained that two of the foreclosures were not valid as the banks provided no such proof regarding ownership of the mortgages.

An analyst of Graham Fisher and company, Joshua Rosner, said that the ruling was a landmark one and it also pointed out that for a mortgage to be valid in Massachusetts the name of the assignee has to be mentioned. As a result of the ruling U. S Bancorp (the 5th biggest U. S bank in terms of deposits fell by 0.8 percent whereas Wells Fargo (the 4th biggest U. S lenders in terms of assets) fell by 2 percent. The traders were concerned about the fallout hitting JP Morgan. Shares of the company closed at $43.64 which was lower by 84 cents.

A lawyer of Florida, Mathew Weidner, said that though the judgment was made by the state court of Massachusets it would be used by householders of other states as reference in other cases of foreclosure too. Investigations throughout the nation began when JP Morgan along with Ally Financial Incorporation declared that they would no longer continue acts of repossessions in all twenty three states where seizures of homes are supervised by the courts.

In the meantime large amount of call options were sold. Call options refer to the right of buying shares at a determined price. Elsewhere mention must be made that a sudden huge amount of bearish activity hit the Apollo Group which is University of Phoenix’s parent company. Apollo’s shares declined by nearly one third in the previous year and speculations were that of bearish activities. Apollo Group Incorporation’s $34, at prices on Friday, put profit which showed drops higher than 12 percent in its stock.