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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.


MBS Actions Drive Mortgage Litigation Index to Record High

Third-Quarter 2011 Mortgage Litigation Index 218

Jan. 9, 2012

By MortgageDaily.com staff


Mortgage lawsuits ascended to the highest level since the Mortgage Litigation Index was first issued for 2007. While foreclosure and investor litigation played a role in the surge, cases involving mortgage-backed securities had the biggest impact.

The Third Quarter 2011 Mortgage Litigation Index from MortgageDaily.com came in at 218 total cases. The report was prepared in conjunction with Patton Boggs LLP and reflects activity covered by MortgageDaily.com.

The count was up from 190 second-quarter cases and 151 in the same period a year earlier.

Helping to drive overall activity up were foreclosure cases, which jumped from 67 in the second quarter to 90 -- the most of any category. Foreclosure litigation includes actions challenging the foreclosure process and complaints against foreclosure-rescue firms.

But it was the No. 3 category, MBS litigation, that had the biggest impact on the latest index, with MBS cases rising by 36 from the second quarter.

"The increase in MBS litigation is partly driven by statutes of limitations on investors' claims," says Patton Boggs Partner Patrick McManemin. "State claims against originators for alleged mishandling of portfolios, inadequate underwriting practices and misrepresentations regarding loan quality on the part of private and GSE litigants can only be preserved by filing lawsuits before claims expire."


Top Categories*
Category Q3 2011 Q2 2011 Q3 2010
Total 218 190 151
Foreclosure 90 67 21
Investor 82 50 23
MBS 62 26 12
Servicing 51 65 5
Criminal 34 44 17
*totals don't add up because many
cases counted in more than one category.



Servicers spent less time in court, with the case count falling to 51 from the second quarter's 65. Also lower were criminal actions, which fell to 34 tracked cases from 44 the previous quarter.


Third Quarter 2011 Mortgage Litigation Index
Case Count by Type & Quarter

Category
Description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
Full Year 2007
Total Total Cases Tracked (some cases tracked in multiple categories) 218 190 151 151 106 75 155 134 76 125 81 46
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 1 0 4 4 2 2 4 13 18 9 4 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 4 2 1 0 0 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. 1 4 5 3 3 2 6 2 2 1 0 0
1
2
8
5
Bankruptcy- Corporate Litigation surrounding companies that file for bankruptcy protection or bankruptcy liquidation 5 1 3 5 6 4 9 7 9 8 2 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 1 2 1 1 0 0 4 1 2 1 1 0
0
0
0
1
Commitments Loan commitment litigation. 0 0 0 0 0 0 2
0
0
0
0
0
0
0
0
0
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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. 11 22 5 4 0 0 7 4 3 5 8 6
3
1
5 (RESPA),
6 (TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 1 0 0 0 1 1 2 1 0 0 2 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 1 0 1 0 2 3 1 9 5 0 3 0
1
2
3
3
Criminal Cases involving criminal complaints. 34 44 27 26 17 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. 3 12 1 1 1 1 2 2 1 5 5 2
2
3
2
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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 0 0 0 0 0 1 0 0
0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement. 2 5 4 5 4 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. 10 9 11 8 12 3 8 3 4 3 4 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 2 5 6 2 0 2 2 0 0 0 1 4
8
1
2
Foreclosures Foreclosure lawsuits and cases involving mortgage servicers or foreclosure rescue services. 90 67 46 40 21 29 33 17 10 26 12 3
7
6
9
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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 1 0 1 1 0 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 1 0 0 0 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. 82 50 42 46 23 26 38 18 11 31 21 11
9
Leads Litigation about mortgage leads. 2 2 0 0 1 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 0 6 4 1 1 4 0 5 0 1
8
2
1
2
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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. 62 26 19 22 12 13 26 17 4 16 13 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 1 0 0 1 0 0 1 0 1 0 3 0
0
0
0
1
Military Actions involving military borrowers (added to report in Q2 2011). 2 2 2 0
0
0
0
1
0
0
0
1
0 0
0
0
Modifications Actions tied to loan modifications and modification firms. 21 19 24 37 12 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 12 7 5 5 10 11 3 11 5 5
7
3
Mortgage Insurance Lawsuits tied to mortgage insurance. 0 1 1 1 0 0 24 4 0 2 2 0 0 0 0 0
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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 0 0 0 0 0 5 0 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 2 0 1 4 2 1 6 3 1 6 3 4
7
3
0
7
Preemption Lawsuits about federal regulatory preemption over state regulation. 0 0 0 0 0 0 0 0 0 1 0 1
1
3
0
1
Privacy Lawsuits about privacy issues. 2 0 1 0 0 0 1 1 0 0 4 3
1
1
0
3
Regulatory Lawsuits by or against regulatory agencies. 29 30 7 1 6 0 0 0 1 0 0 0 0 0 0 0
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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. 1 1 1 2 0 0 3 0 0 0 1 0 0 0 0 0
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 8 27 11 15 8 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. 51 65 49 26 5 9 3 6 3 2 6 3
3
2
6
Suitability Lawsuits about mortgage company liability in determining suitability of loans for borrowers. 0 0 1 0 0 0 2 1 0 1 1 3
0
0
0
1
Technology Lending technology issues litigated. 0 0 0 1 0 1 2 1 2 0 0 0
1
1
1
2
Title Litigation tied to property title and title insurance claims. 31 6 8 2 5 3 1 0 0 0 0 0 0 0 0 0
YSP Litigation centered around yield spread premiums and YSP disclosures. 0 1 0 1 1 1 0 0 1 2 0 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 218 190 151 151 106 75 155 134 76 125 81 46
category
description
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 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


Third-Quarter 2011 Mortgage Litigation Index 218
Mortgage Backed Securities | MBS News | MBS Statistics
News about commercial and residential mortgage-backed securities. Stories about ratings actions and changes to servicer ratings. Studies and reports about the performance of securitizations and problem vintages and classes. Subprime, Alt-A, home equity and j u m b o analysis.




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