Feature Article: VER Litigation

By Veronica Rendon

The good news: the overall filing of federal litigations in 2007 was drastically reduced from the prior year. The bad news: federal securities litigations increased for the first time in three years. The reason: turmoil in the capital markets resulting primarily from the subprime credit crises.  more»

Several Proposed Amendments to the Bankruptcy Code Seek To Permit Mortgage Loan Modifications

By Jason Butler

Several members of Congress have introduced competing bills to amend the Bankruptcy Code, and allow judges to modify certain mortgages in a Chapter 13 bankruptcy.  The four bills share one essential feature: each would allow a bankruptcy judge to “strip down” a mortgage loan on a primary residence to the home’s current value, if the property is worth less than the total outstanding amount of the debt.  more»

The Federal Reserve’s Proposed Amendments To Regulation Z Threaten To Increase Consumer Litigation Against The Mortgage Industry

By Jason Butler

On December 18, 2007, the Federal Reserve proposed important new amendments to Regulation Z, which implements the Truth in Lending Act (“TILA”) and Home Ownership and Equity Protection Act (“HOEPA”). The proposal would markedly increase regulation of a broad array of mortgage lending practices, including mortgage loan advertising, consumer disclosures, the assessment of borrowers’ ability to repay, and products such as no-asset verification mortgages, and mortgages involving prepayment penalties.  Although Federal Reserve Chairman Ben S. Bernanke has stated that the proposed amendments were designed “with an eye toward deterring improper lending and advertising practices without unduly restricting mortgage credit availability,” the new regulations may both make it more difficult for qualified borrowers to obtain a mortgage, and expose mortgage lenders to significantly increased risks of litigation and potential liability. more»