Mortgage servicers faced a dramatic uptick in litigation during the final three months of 2010, according to a new report from Mortgage Daily. The firm, which tracks litigation activity through its Mortgage Litigation Index, said legal actions against servicers pushed the index 42% higher in the last quarter of 2010 as foreclosure cases and loan modification requests piled up nationwide. For the quarter ended Dec. 31, 151 mortgage-related lawsuits were filed, according to Mortgage Daily. That compares to 106 cases during the previous three months and 134 during the fourth quarter of 2009. Investor lawsuits also doubled between the third and fourth quarter as litigation involving mortgage-backed securities rose and secondary-market litigation doubled, the report said. "The affirmative inquiries of state attorneys general, legislators and courts in the mortgage assignment and mortgage foreclosure processes have fostered an environment where mortgage-related litigation has expanded on all fronts," said Anthony Laura, a partner in Mortgage Daily's Newark office. "While the increase in servicing cases is stark, the increase in suits by investors alleging missteps in the origination and securitization process is especially worth noting, as hundreds of millions of dollars are often at stake in those loan portfolio repurchase cases." Write to Kerri Panchuk.