Mortgage Mess Spurs Suits
Posted Aug 22, 2007 7:40 AM CDT
By Debra Cassens Weiss
Attorneys likely won’t have any trouble finding defendants to sue over the meltdown in the mortgage markets.
Suits have already been filed by investors in bankrupt mortgage companies and mortgage-backed securities, by borrowers, and by lenders that provide interim financing until a mortgage is sold, the New York Law Journal reports.
"Given the size of the losses, there won't be any lack of targets" to sue, lawyer Philip Forlenza told the legal publication. Forlenza is a partner at Patterson Belknap Webb & Tyler, which has formed a subprime mortgage practice team. Several law firms have beefed up practices in anticipation of mortgage-related litigation, ABAJournal.com has noted.
A securities class action suit claims American Home Mortgage Investment failed to disclose increasing loan delinquencies and difficulties selling its loans. American Home filed for bankruptcy protection this month.
A suit against another lender that filed for bankrtupcy, New Century Mortgage, claims the company misappropriated mortgage payments on loans owned by UBS Real Estate Securities Inc.