- Dennis Norman
A surge in litigation tied to real estate appraisals, loan modifications and foreclosures contributed to a 54 percent increase in mortgage-related lawsuits, according to the second quarter Mortgage Litigation Report from MortgageDaily.com.
During the second quarter, 125 cases were tracked, jumping from an already active 81 first quarter cases. The second quarter of 2008 had just 42 cases.
Leading the pack in cases were loan modification cases – which jumped to 22 from none tracked in the first quarter. Much of the activity was tied to actions against modification firms. The increase in cases coincided with the launch of the Obama administration’s Home Affordable Modification program.
Also surging were foreclosure cases, which jumpted to 26 actions from just 12.
Investor lawsuits and class action suits continued to dominate mortgage-related litigation, rising to 31 cases from 21 in the first quarter. However, as the stock market has recently recovered, third-quarter investor litigation appears to be easing.
Second quarter appraisal lawsuits increased to 11 from two in the prior period. Appraisal related activity grew just as the Home Valuation Code of Conduct was implemented.
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