Mortgage litigation grew by more than 40% in the third quarter, a new report states. Activity on more than 100 civil and criminal mortgage-related cases was tracked from July 1 through Sept. 30, according to the Mortgage Litigation Index, released by Mortgage Daily and Patton Boggs.
Activity jumped from the second quarter's 75 cases and was up similarly from the same period last year. Cases involving investor actions taken as a result of alleged violations to the Securities Exchange Act of 1934 outnumbered all other types, though activity was lower than in the second quarter, Mortgage Daily and Patton Boggs say. Coming in next were actions related to foreclosures.
‘In recent months, the focus of mortgage litigation has begun to transition from primarily consumer foreclosure disputes towards loan documentation and servicing issues,’ says Patrick McManemin, a partner in Patton Boggs' Dallas office. ‘Therefore, an increase in residential note repurchase litigation from investors in securitization trusts and banks that face indemnity claims from government-sponsored enterprises should be expected.’
SOURCE: Mortgage Litigation Index