PRESS RELEASE
Mortgage Litigation Index Eases
DALLAS — (Sept. 24, 2012) /PRNewswire/ Lawyers acting on behalf of mortgage industry stakeholders slowed legal activity during the first quarter — a period that included an historic servicer settlement. But some categories — including compliance, loan titles and whistleblower actions — were busier. Most categories were significantly elevated versus a year earlier.
Mortgage Daily tracked 216 mortgage-related lawsuits that had activity during the first quarter, according to the Mortgage Litigation Index. Case activity eased from the fourth-quarter 2011, when the number tracked was 244.
Despite the quarterly decline, litigation activity still remains elevated by historical standards, and caseload increased from 151 cases in the first-quarter 2011.
“Still, a decrease should be cause for some hope, shouldn’t it,” asked Ballard Spahr LLP Partner Christopher Willis in an accompanying white paper. “Unfortunately, I believe it is not, because of the underlying factors that likely operated to reduce litigation in the first quarter, and the continued presence of very strong drivers for more mortgage litigation for the remainder of this year.”
The first quarter included the $25 billion settlement between the nation’s five-biggest servicers and state attorneys general over questionable foreclosure practices.
The ranking of the busiest categories was unchanged from three months earlier, with foreclosure litigation topping the list.
All major categories saw a substantial increase over the year-earlier period.
| Category | Q1 2012 | Q4 2011 | Q1 2011 |
| Total | 216 | 244 | 151 |
| Foreclosure | 89 | 99 | 46 |
| Servicing | 65 | 70 | 49 |
| Investor | 62 | 62 | 42 |
| Criminal | 56 | 57 | 27 |
| Title | 47 | 46 | 8 |
Whistleblower actions jumped to three from just one tracked in the prior quarter.
Another big gainer was compliance, with compliance cases growing to 11 from seven.
The first quarter had fewer cases tied to mortgage fees, and a one-third decline from the fourth-quarter was recorded for the appraisal, license and suitability categories.
Litigation involving regulators dropped, while modification actions were also down. Mortgage fraud litigation was off.
