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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 Up 41%

Third-Quarter 2010 Mortgage Litigation Index

Dec. 13, 2010

By MortgageDaily.com staff


Legal actions tied to mortgage-lending jumped by more than 40 percent in the third quarter of the year based on the Mortgage Litigation Index.

Activity on more than 100 civil and criminal mortgage-related cases was tracked from July 1 through Sept. 30 in the report, which is based on cases covered by Mortgage Daily. The report was prepared in conjunction with Patton Boggs.

Activity leapt from the second quarter's 75 cases and was up similarly from the same period last year. Cases involving investor actions taken as a result of alleged violations to the Securities Exchange Act of 1934 outnumbered all other types, though activity was lower than in the second quarter. Coming in next were actions related to foreclosures, an area that has recently drawn intense scrutiny.

"In recent months, the focus of mortgage litigation has begun to transition from primarily consumer foreclosure disputes towards loan documentation and servicing issues. Therefore, an increase in residential note repurchase litigation from investors in securitization trusts and banks that face indemnity claims from government-sponsored enterprises should be expected," said Patrick McManemin, a partner in Patton Boggs' Dallas office.

The No. 3 category, criminal, jumped to 17 cases from 11 earlier in the year, and litigation tied to mortgage employment soared to 12 cases from just three.


Third Quarter 2010 Mortgage Litigation Index

Category
Description
# of Cases Q3 2010 # 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) 106 75 155 134 76 125 81 46
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 2 2 4 13 18 9 4 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 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. 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 6 4 9 7 9 8 2 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 0 0 4 1 2 1 1 0
0
0
0
1
Commitments Loan commitment litigation. 0 0 2
0
0
0
0
0
0
0
0
0
category
description
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. 0 0 7 4 3 5 8 6
3
1
5 (RESPA),
6 (TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 1 1 2 1 0 0 2 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 2 3 1 9 5 0 3 0
1
2
3
3
Criminal Cases involving criminal complaints. 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. 1 1 2 2 1 5 5 2
2
3
2
category
description
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 1 0 0
0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement and accounting fraud. 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. 12 3 8 3 4 3 4 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 0 2 2 0 0 0 1 4
8
1
2
Foreclosures Servicer-related litigation, foreclosure lawsuits and cases against foreclosure rescue services. 21 29 33 17 10 26 12 3
7
6
9
category
description
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 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 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. 23 26 38 18 11 31 21 11
9
Leads Litigation about mortgage leads. 1 0 1 1 2 0 2 0 0
0
0
0
Licenses Regulator lawsuits and actions against improperly licensed and unlicensed mortgage companies. 4 1 1 4 0 5 0 1
8
2
1
2
category
description
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. 12 13 26 17 4 16 13 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 0 0 1 0 1 0 3 0
0
0
0
1
Modifications Actions tied to loan modifications and modification firms. 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 5 10 11 3 11 5 5
7
3
Mortgage Insurance Lawsuits tied to mortgage insurance. 0 0 24 4 0 2 2 0 0 0 0 0
category
description
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 5 0 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 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 1 0 1
1
3
0
1
Privacy Lawsuits about privacy issues. 0 0 1 1 0 0 4 3
1
1
0
3
Regulatory Lawsuits by or against regulatory agencies. 6 0 0 0 1 0 0 0 0 0 0 0
category
description
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. 0 0 3 0 0 0 1 0 0 0 0 0
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 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. 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 2 1 0 1 1 3
0
0
0
1
Technology Lending technology issues litigated. 0 1 2 1 2 0 0 0
1
1
1
2
Title Litigation tied to property title and title insurance claims. 5 3 1 0 0 0 0 0 0 0 0 0
YSP Litigation centered around yield spread premiums and YSP disclosures. 1 1 0 0 1 2 0 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 106 75 155 134 76 125 81 46
category
description
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


Mortgage Litigation Index Chart
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