September 15, 2009
Lawyers taking advantage of foreclosure mess
Attorneys are getting into mortgage modification schemes in unprecedented numbers says the Los Angeles Times.
Lawyers are telling their clients they can help them modify their mortgages and charge them thousands of dollars without being much help in many cases.
Filed under California, Law by Luke Ford
October 19, 2008
Fannie Mae Faces Serious Lawsuit
A class-action lawsuit alleging securities fraud by the company could yield a hefty payment to shareholders. A vigorous defense on Fannie's part would require rebutting the agency's own report. Mr. Ajamie isn't involved with the Fannie case.
The Federal Housing Finance Agency, Fannie and Freddie's regulator, is the new, more powerful incarnation of the companies' former overseer, the Office of Federal Housing Enterprise Oversight. Fannie and Freddie shares have lost more than 95% of their value this year.
Former Ohio Attorney General Jim Petro filed a class-action securities-fraud lawsuit against Fannie and its top executives in November 2004, accusing the company of manipulating its accounting to artificially inflate its stock price. This period may be extended to investors who bought or sold Fannie shares to September 2005 or even February 2006.
A so-called status conference, or a progress report, on the Fannie case is being held Oct. 20.
The regulator's predicament may work to the advantage of shareholders, securities lawyer Mr. Ajamie said.
Filed under Law, fannie mae by Luke Ford
Nothing makes lawyers more popular than bad times.
Defense lawyers were gleeful.
Individual shareholders as well as big companies want someone else to pay for their losses on investments in everything from basic stocks to exotic swaps. And lawyers are emboldened in their claims by the huge losses and obvious errors in judgment at companies that, until recently, confidently asserted their immunity to market turbulence.
Investors’ lawyers can point at statements and actions by regulators to bolster their claims. In a suit filed in mid-September by Fannie Mae shareholders, the plaintiffs blamed a government plan to buy shares of the company and then take it over for helping to depress the company’s stock price. The lawsuit names Merrill Lynch, Citigroup, Morgan Stanley and others as defendants, accusing them of making false statements about Fannie Mae’s financial condition.
A recent report by the law firm Fulbright & Jaworski found that more than one-third of lawyers working internally for companies expected to see more litigation in 2009. Lawyers at the biggest companies were more likely to expect a boom in lawsuits, according to the study.
Armed with such data, shareholders have charged the courthouse steps, claiming that companies failed to disclose their vulnerability to declines in the real estate market, often through holdings of securities backed by home loans. Even companies that have suffered huge losses may still be worth pursuing because of their liability insurance.
A suit filed last month by investors who bought Freddie Mac shares names only Goldman Sachs, JPMorgan Chase and Citigroup. The suit claims that the investment firms, which underwrote a Freddie Mac stock offering, did not disclose the company’s “massive exposure to mortgage-related losses.” “The plaintiffs’ firm will try to amend the existing complaint in order to allege subprime losses,” said Stephen Froot, a partner at Boies Schiller & Flexner. Almost three weeks ago, MBIA filed a lawsuit against Countrywide Financial, accusing the company of lying about the quality of mortgage-backed securities that MBIA essentially guaranteed.
Filed under Law by Luke Ford
October 17, 2008
607 Subprime-Related Lawsuits In America
Lawyers are circling the carrion from the US financial crisis for a steady diet of lawsuits and litigation. Hundreds of lawsuits vying for "class action" status had been filed even before the latest downward spiral in the crisis.
Filed under Law by Luke Ford
February 26, 2008
Local Governments Bailing Out Trouble Loans
William Yardley writes about local governments lending money to save people from foreclosure.
Many wonder the government is bailing out the middle class?
Why should tax payers subsidize the well off who make bad loan decisions?
Filed under Foreclosure, Law, Lenders by Luke Ford
The IHT reports that Uncle Sam might buy up to $15 billion worth of bad mortgages.
The U.S. government might buy up to one million mortgages over five years to help reduce foreclosures and stablize lenders.
January 13, 2008
Change in bankruptcy laws pondered amid home mortgage meltdown
WASHINGTON | After being hooked with ill-advised subprime loans on their homes, many thousands of Americans could end up gaffed in bankruptcy courts next year.
Despite a new law to make filings more painful, bankruptcies surged by nearly 40 percent in 2007, leading Samuel Gerdano, American Bankruptcy Institute director, to predict “even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis.”
Read more on Change in bankruptcy laws pondered amid home mortgage meltdown…
Filed under Law by Luke Ford