The Patton Boggs Mortgage Litigation Index shows a rise in cases involving foreclosures, mortgage services and repurchase activity in the second quarter of 2011. Large mortgage servicers like Bank of America and Wells Fargo have come under increased pressure as more federal and private investors and mortgage holders challenge bank practices in mortgage-backed securities sales and foreclosure handling. For more on this continue reading the following article from The Street.
Foreclosure lawsuits spiked during the second quarter, driving the Mortgage Litigation Index to its highest level since it was introduced in 2007.
The Mortgage Litigation Index reflects all mortgage-related cases compiled by MortgageDaily.com , an online mortgage news publication in conjunction with law firm Patton Boggs.
The Second Quarter 2011 Mortgage Litigation Index came in at 190 total cases for the April to June period. Foreclosure litigation, which involves rulings in favor of borrowers or cases against rescue firms, was up two-thirds from the first quarter, at a total of 67 cases, according to the report.
Cases involving mortgage services was the second highest at 65. Repurchase activity was also up significantly, more than doubling to 27 cases. Lawsuits that allege mortgage compliance violations more than quadrupled from the first quarter.
The nation’s largest mortgage servicers including Bank of America(BAC), JPMorgan Chase(JPM) and Wells Fargo(WFC) have been seeing rising litigation expenses as they continue to get pushback from investors holding souring mortgage-backed securities as well as borrowers who claim they have been subject to improper foreclosures.
This article was republished with permission from The Street.