Mortgage servicing litigation up 88% in first quarter
New statistics show mortgage servicing litigation rose 88% in the first quarter, validating Federal Deposit Insurance Corp. Chairman Sheila Bair when she sounded the alarm on an influx of lawsuits in May. Bair said last month it's unknown how mortgage servicers will be impacted by a slew of lawsuits challenging the transfer of notes and the handling of loan documents. But, she still found the possibility of more litigation a worthy enough cause to share her thoughts on the subject with the Senate Banking Committee. According to MortgageDaily.com's latest Mortgage Litigation Index, litigation against servicers rose 88% in the first quarter even as overall mortgage-related litigation remained unchanged from the previous quarter. There were 50 mortgage servicing lawsuits in the first three months of 2011 compared to only a handful a year earlier, MortgageDaily said. At the same time, litigation filed by investors and lawsuits associated with loan modifications fell in the first quarter when compared to the final quarter of 2010. Bank of America (BAC) reported $940 million in litigation costs during the first quarter, which increased from $588 million one year ago but dipped from $1.5 billion in the previous period. JPMorgan Chase (JPM) reported $1.1 billion in litigation expenses during the first quarter, down from $2.9 billion one year ago. Write to: Kerri Panchuk.