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Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.


Mortgage Litigation Index Tumbles

Second-Quarter 2010 Mortgage Litigation Index

Sept. 13, 2010

By MortgageDaily.com staff


As the government shifted its resources from civil to criminal mortgage-related cases, the Mortgage Litigation Index sank by more than half.

Active cases totaled 75 in the second-quarter report, which reflects mortgage-related legal actions covered by Mortgage Daily between April 1 and June 30. The report was prepared in conjunction with Patton Boggs LLP.

Activity tumbled 52 percent from the first quarter and was 40 percent lower than a year ago.

As the government executed Operation Stolen Dreams, mortgage fraud criminal actions leapt -- sending Mortgage Daily's mortgage fraud index higher.

But criminal fraud cases -- except those primarily involving an insider at the mortgage lender -- are generally excluded from the Mortgage Litigation Index. The reallocation of government resources cut into actions related to modifications, foreclosures and non-fraud criminal cases -- which are included in the Mortgage Litigation Index and helped drag down overall activity.

"Don't be fooled by what appears to be a lull in the government's civil litigation efforts against the mortgage industry. Once federal resources are reallocated in response to the sweeping financial reform legislation passed earlier this year, expect civil enforcement efforts to increase beyond the levels we saw prior to Q2 '10," said Anthony Laura, a partner in Patton Boggs' New Jersey office.

A big decline in mortgage insurance litigation was primarily the result of a burst in the prior quarter's FHA-related activity that didn't continue into the latest period.

Second Quarter 2010 Mortgage Litigation Index

Category
Description
# of Cases Q2 2010 # of Cases Q1 2010 # of Cases Q4 2009 # of Cases Q3 2009 # of Cases Q2 2009 # of Cases Q1 2009
# of Cases Q4 2008
# of Cases Q3 2008
# of Cases Q2 2008
# of Cases Q1 2008
# of Cases Full Year 2007
Total Total Cases Tracked (some cases tracked in multiple categories) 75 155 134 76 125 81 46
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 2 4 13 18 9 4 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 1 2 0 2 11 2 1
3
0
0
5
Bankruptcy- Consumer Legal issues surrounding borrowers who file for bankruptcy, including servicing bankrupt borrowers. 2 6 2 2 1 0 0
1
2
8
5
Bankruptcy- Corporate Litigation surrounding companies that file for bankruptcy protection or bankruptcy liquidation 4 9 7 9 8 2 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 0 4 1 2 1 1 0
0
0
0
1
Commitments Loan commitment litigation. 0 2
0
0
0
0
0
0
0
0
0
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Compliance Lawsuits and actions tied to violations of mortgage regulations. 0 7 4 3 5 8 6
3
1
5
(RESPA)

6
(TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 1 2 1 0 0 2 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 3 1 9 5 0 3 0
1
2
3
3
Criminal Cases involving criminal complaints. 11 24 11 4 5 0 0 0 0 0 0
Discrimination Class actions and lawsuits related to lending discrimination involving minorities, neighborhoods and property types. 1 2 2 1 5 5 2
2
3
2
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Down Payment Assistance Cases about the legality of DPA programs and HUD's ability to prohibit them. 0 0 0 1 0 0
0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement and accounting fraud. 0 3 2 0 1 0 1
1
1
0
0
Employment Employment lawsuits involving overtime, employment discrimination and employment contracts. Whistleblowers and WARN notice violation cases also. 3 8 3 4 3 4 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 2 2 0 0 0 1 4
8
1
2
Foreclosures Servicer-related litigation, foreclosure lawsuits and cases against foreclosure rescue services. 29 33 17 10 26 12 3
7
6
9
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
HELOC Cases related to home-equity lines-of-credit 0 0 0 0 4 0 0 0
0
0
0
Insider Trading Criminal cases about mortgage executives accused of trading securities based on insider information. 0 0 0 1 1 0 0
0
0
0
2
Investor Shareholder lawsuits and class actions accusing companies of inflating earnings, overstating capital position or otherwise deceiving investors in the company. Other shareholder issues. 26 38 18 11 31 21 11
9
Leads Litigation about mortgage leads. 0 1 1 2 0 2 0 0
0
0
0
Licenses Regulator lawsuits and actions against improperly licensed and unlicensed mortgage companies. 1 1 4 0 5 0 1
8
2
1
2
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
MBS Lawsuits related to mortgage-backed securities. 13 26 17 4 16 13 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 0 1 0 1 0 3 0
0
0
0
1
Modifications Actions tied to loan modifications and modification firms. 6 15 61 30 22 0
0
0
0
0
0
Mortgage Fraud Big cases involving mortgage fraud, flipping, identity theft and inflated appraisals where a lender employee is involved. 5 10 11 3 11 5 5
7
3
Mortgage Insurance Lawsuits tied to mortgage insurance. 0 24 4 0 2 2 0 0 0 0 0
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Net Branch Litigation involving net branch operations. 0 0 0 0 5 0 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 1 6 3 1 6 3 4
7
3
0
7
Preemption Lawsuits about federal regulatory preemption over state regulation. 0 0 0 0 1 0 1
1
3
0
1
Privacy Lawsuits about privacy issues. 0 1 1 0 0 4 3
1
1
0
3
Regulatory Lawsuits by or against regulatory agencies. 0 0 0 1 0 0 0 0 0 0 0
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Reverse Mortgages Litigation tied to home-equity conversion mortgages and reverse mortgage issues, programs and lenders. 0 3 0 0 0 1 0 0 0 0 0
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 3 4 4 2 5 5 3
3
9
Servicing Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure. 9 3 6 3 2 6 3
3
2
6
Suitability Lawsuits about mortgage company liability in determining suitability of loans for borrowers. 0 2 1 0 1 1 3
0
0
0
1
Technology Lending technology issues litigated. 1 2 1 2 0 0 0
1
1
1
2
Title Litigation tied to property title and title insurance claims. 3 1 0 0 0 0 0 0 0 0 0
YSP Litigation centered around yield spread premiums and YSP disclosures. 1 0 0 1 2 0 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 75 155 134 76 125 81 46
category
description
Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007


*several cases were counted in multiple case types


Mortgage Litigation Index Chart
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