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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 Lawsuits Ease

Review of fourth-quarter mortgage-related litigation

March 9, 2009

By MortgageDaily.com staff


Despite a surge in actions taken by bank regulators, overall mortgage litigation eased in the Fourth Quarter Mortgage Litigation Report.

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.

A total of 202 active cases were tracked in the latest report. Many fell into more than one of the 22 categories covered during the latest period. Excluding regulatory-only actions, 46 cases were tracked -- tumbling from 74 cases in the third quarter but about the same as the quarterly average for 2007.

The biggest volume of activity was with regulatory actions, which jumped to 161 from the third quarter's 126 -- reflecting deteriorating capital at the weakest U.S. banks. Investor class actions eased, though 11 cases were still tracked.

After no third-quarter activity -- four mortgage-backed securities lawsuits, three mortgage employment lawsuits and three suitability cases were tracked in the fourth quarter.

Most categories, however, saw a decline during the fourth quarter.

Cases tied to mortgage compliance tumbled from 18 in the third quarter to six during the latest period. Mortgage fraud litigation was down similarly, falling to five cases in the fourth quarter from 18. Secondary marketing lawsuits fell from 12 cases to just three.

Mortgage fee lawsuits were down by half in the fourth quarter, while predatory lending actions declined 43 percent.

Likely reflecting private and public efforts to stem foreclosures, fourth-quarter foreclosure lawsuits were off by more than half.

Category
Description
# 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) 202
200
45
42
195
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 1
3
0
0
5
Bankruptcy- Consumer Legal issues surrounding borrowers who file for bankruptcy, including servicing bankrupt borrowers. 0
1
2
8
5
Bankruptcy- Corporate Litigation surrounding companies that file for bankruptcy protection or bankruptcy liquidation 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 0
0
0
0
1
Compliance Lawsuits and regulatory actions tied to violations of the Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair Housing Act, Home Mortgage Disclosure Act (HMDA), FTC Act, Home Owners Equity Protection Act (HOEPA), Real Estate Settlement Procedures Act (RESPA) and Truth In Lending Act (TILA). 6
3
1
5
(RESPA)

6
(TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 0
1
2
3
3
Discrimination Class actions and lawsuits related to lending discrimination involving minorities, neighborhoods and property types. 2
2
3
2
Down Payment Assistance Cases about the legality of DPA programs and HUD's ability to prohibit them. 0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement and accounting fraud. 1
1
1
0
0
Employment Employment lawsuits involving overtime, employment discrimination and employment contracts. Whistleblowers and WARN notice violation cases also. 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 4
8
1
2
Foreclosures Servicer-related litigation, foreclosure lawsuits and cases against foreclosure rescue services. 3
7
6
9
Insider Trading Criminal cases about mortgage executives accused of trading securities based on insider information. 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. 11
9
Licenses Regulator lawsuits and actions against improperly licensed and unlicensed mortgage companies. 1
8
2
1
2
MBS Lawsuits related to mortgage-backed securities. 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 0
0
0
0
1
Mortgage Fraud Cases involving mortgage fraud, flipping, identity theft and inflated appraisals. 5
7
3
Net Branch Litigation involving net branch operations. 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 4
7
3
0
7
Preemption Lawsuits about federal regulatory preemption over state regulation. 1
1
3
0
1
Privacy Lawsuits about privacy issues. 3
1
1
0
3
Regulatory Regulator actions against financial institutions and mortgage licensees. 161
na
na
na
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 3
3
9
Servicing Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure. 3
3
2
6
Suitability Lawsuits about mortgage company liability in determining suitability of loans for borrowers. 3
0
0
0
1
Technology Lending technology issues litigated. 0
1
1
1
2
YSP Litigation centered around yield spread premiums and YSP disclosures. 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 202
200
45
42
195


*several cases were counted in multiple case types

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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