Ballard Spahr attorney: Foreclosure-litigation risk remains
Mortgage-related litigation increased 15% in 2012 when compared to year earlier levels, according to Mortgage Daily's latest mortgage litigation report.
Ballard Spahr attorney Christopher Willis added that litigation risk is likely to remain high in the foreclosure category for the foreseeable future.
Willis cites data from Mortgage Daily’s Fourth Quarter 2012 Litigation Index, which shows 934 mortgage litigation cases recorded last year. In the final two quarters of 2012, activity levels died down.
Still, Willis says in a new white paper that the “current magnitude of mortgage litigation is still higher than any of the litigation numbers recorded between 2007” and the third quarter of 2011.
And six of the highest total litigation figures were recorded in just the past six quarters.
"The data suggests that foreclosure activity is converting into litigation at a higher rate than previously existed, and we suspect that the accumulated weight of continued publicity, governmental enforcement actions, and evolving theories of liability for mortgage servicers are all contributing to this trend," Willis wrote.
"This means that, even though mortgage delinquencies and foreclosure numbers are moving in a lower direction, the level of foreclosure- and delinquency-spawned litigation may continue to persist at its current high levels," he added.