MBS, Foreclosure Lawsuits Jump

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5 · 26 · 09

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
Bank of America 2
Citigroup 3
Countrywide 6
JPMorgan 3
Merrill Lynch 3
Wachovia 8
Washington Mutual 2
Wells Fargo 5

Mortgage Expert

Mortgage Daily Staff



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