Legal actions tied to mortgage lending jumped by 41 percent during the third quarter of the year, according to industry data released this week.
Activity on more than 100 civil and criminal mortgage-related ""cases was tracked"":http://www.pattonboggs.com/media/detail.aspx?news=1327 from July 1 through September 30 in the report prepared by the mortgage banking litigation firm ""Patton Boggs"":http://www.PattonBoggs.com. By comparison, the firm's second-quarter report tracked 75 such cases.
[IMAGE] [COLUMN_BREAK]Suits involving investor actions taken as a result of alleged violations to the Securities Exchange Act of 1934 outnumbered all other types, though activity was lower than in the second quarter.
Coming in next were actions related to foreclosures, an area that has recently drawn intense scrutiny with reports of so-called robo-signing at a number of large servicing shops.
""In recent months, the focus of mortgage litigation has begun to transition from primarily consumer foreclosure disputes towards loan documentation and servicing issues,"" explained Patrick McManemin, a partner in Patton Boggs' Dallas office. ""Therefore, an increase in residential note repurchase litigation from investors in securitization trusts and banks that face indemnity claims from government-sponsored enterprises should be expected.""
The No. 3 category, criminal, jumped to 17 cases from 11 earlier in the year, while litigation tied to mortgage employment soared to 12 cases from just three the previous quarter.