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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, Foreclosure Lawsuits Jump

Review of first-quarter mortgage-related litigation

May 26, 2009

By MortgageDaily.com staff


Investors of mortgage-backed securities led an increase in mortgage-related litigation, according to the First Quarter Mortgage Litigation Report. An increase in the number of foreclosure lawsuits also contributed to the rise in legal activity.

The study, based on an analysis of active cases covered by MortgageDaily.com, was prepared in conjunction with the law firm of Weiner Brodsky Sidman Kider PC.

During the first quarter, a total of 81 cases were tracked, up from less than 50 cases in the prior quarter and the first-quarter 2008.

MBS litigation jumped to 13 cases from just four lawsuits in the fourth quarter. The increase in MBS filings helped push class actions filed on behalf of investors to 21 cases -- the most of any type.

The number of cases tied to foreclosures, including cases against foreclosure-rescue and modification services, leapt to 12 from the fourth quarter's four.

Wachovia was named as a defendant in eight of the cases tracked by MortgageDaily.com -- more than any other company. Parent Wells Fargo was named in five.

Only two lawsuits covered by MortgageDaily.com named Bank of America as a defendant. But subsidiaries Countrywide and Merrill Lynch were named in nine.

Company # Cases reported by
MortgageDaily.com
Bank of America 2
Citigroup 3
Countrywide 6
GMAC 3
JPMorgan 3
Merrill Lynch 3
Wachovia 8
Washington Mutual 2
Wells Fargo 5

Category
Description
# 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) 81 46
74
45
42
195
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 4 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 2 1
3
0
0
5
Bankruptcy- Consumer Legal issues surrounding borrowers who file for bankruptcy, including servicing bankrupt borrowers. 0 0
1
2
8
5
Bankruptcy- Corporate Litigation surrounding companies that file for bankruptcy protection or bankruptcy liquidation 2 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 1 0
0
0
0
1
Compliance Lawsuits and actions tied to violations of mortgage regulations. 8 6
3
1
5
(RESPA)

6
(TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 2 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 3 0
1
2
3
3
Discrimination Class actions and lawsuits related to lending discrimination involving minorities, neighborhoods and property types. 5 2
2
3
2
Down Payment Assistance Cases about the legality of DPA programs and HUD's ability to prohibit them. 0
0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement and accounting fraud. 0 1
1
1
0
0
Employment Employment lawsuits involving overtime, employment discrimination and employment contracts. Whistleblowers and WARN notice violation cases also. 4 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 1 4
8
1
2
Foreclosures Servicer-related litigation, foreclosure lawsuits and cases against foreclosure rescue services. 12 3
7
6
9
Insider Trading Criminal cases about mortgage executives accused of trading securities based on insider information. 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. 21 11
9
Leads Litigation about mortgage leads. 2 0 0
0
0
0
Licenses Regulator lawsuits and actions against improperly licensed and unlicensed mortgage companies. 0 1
8
2
1
2
MBS Lawsuits related to mortgage-backed securities. 13 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 3 0
0
0
0
1
Mortgage Fraud Cases involving mortgage fraud, flipping, identity theft and inflated appraisals. 5 5
7
3
Mortgage Insurance Lawsuits tied to mortgage insurance. 2 0 0 0 0 0
Net Branch Litigation involving net branch operations. 0 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 3 4
7
3
0
7
Preemption Lawsuits about federal regulatory preemption over state regulation. 0 1
1
3
0
1
Privacy Lawsuits about privacy issues. 4 3
1
1
0
3
Reverse Mortgages Litigation tied to home-equity conversion mortgages and reverse mortgage issues, programs and lenders. 1 0 0 0 0 0
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 5 3
3
9
Servicing Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure. 6 3
3
2
6
Suitability Lawsuits about mortgage company liability in determining suitability of loans for borrowers. 1 3
0
0
0
1
Technology Lending technology issues litigated. 0 0
1
1
1
2
YSP Litigation centered around yield spread premiums and YSP disclosures. 0 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 81 46
74
45
42
195


*several cases were counted in multiple case types



Q4 2008 | Q3 2008 | Q2 2008 | Q1 2008 | full-year 2007

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.




Q4 2008 report

Q3 2008 report

Q2 2008 report

Q1 2008 report

full-year 2007 report


Weiner Brodsky Sidman Kider PC
Weiner Brodsky Sidman Kider PC
1300 19th Street NW 5th Floor
Washington DC 20036
202.628.2000
www/WBSK.com


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