Mortgage Servicing Litigation Activity on the Rise

April 21, 2008 No Comments »


Mortgage servicers are facing a larger number of legal battles as delinquencies and foreclosures continue to rise, according to the First Quarter 2008 Mortgage Litigation Report released by today.

The report analyzed 42 lawsuits related to mortgage banking litigation that took place in the first quarter of the year, finding that the six cases of servicing-related legal action far outpaced the 14 total cases reported in all of 2007.

From January to March, nine foreclosure cases were tracked, compared to just 11 total for all of 2007, while the eight cases involving bankruptcy litigation nearly doubled the five cases tracked all of last year.

The nine secondary market cases reported in the first quarter are also on pace to beat last year’s 23 lawsuits.

On the bright side, the nine investor lawsuits tracked during the latest quarter are far below the annual pace of 53 cases tracked during 2007.

Take a look at all the cases analyzed below:

Category # of Cases

Advertising – 1
Bankruptcy – 8
Credit – 3
Discrimination – 2
Down Payment Assistance – 1
Employment – 6
Fees – 2
Foreclosures -9
Fraud – 3
Investor -9
Licenses -1
Net Branch -1
Secondary Marketing -9
Servicing – 6
Technology – 1

(photo: brookenovak)

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