Friday, April 25, 2008
Subprime Litigation Expected to Reach Record High
According to BNA reports, Navigant Consulting estimates that lawsuits related to subprime mortgage products will top the previous record high number of lawsuits from a single major financial crisis set in the wake of the savings and loan debacle in the early 1990's. During the first quarter of 2008, 170 federal subprime related cases were filed, an 85 % increase from the prior quarter. The rate of filing is two cases per day, including weekends. Most 1Q2008 filings are class actions by borrowers (46%) followed by securities cases and commercial disputes. This puts the subprime fallout on track to beat the old record of 559 savings and loan cases filed in the early 1990's. 448 subprime cases were filed over the 15 month period ending March 31, 2008.