The SubPrime Crisis Prompts Lawsuit Deluge As Losses Mount

LawFuel - The Sub-prime lawsuits have begun, but many claimants face a significant, uphill battle proving liability, lawyers say. The mounting number of foreclosures and defaults has meant the often complex investment products that comprise the various loan packages have lead to $500 billion in losses. There are a number of different types of lawsuits arising from the crisis, including predatory-lending claims and claims that homeowners had not been told about adjustable mortgage rates that could increase in the near-term, along with high penalty fees. There are also lawsuits arising from various bonds that are comprised of subprime mortgage instruments, which is expected to grow as losses mount. Finally there are retail investors that affect pension, mutual ahd hedge fund managers. Securities class action suits such as the one filed by New Century investors against New Century officials – who are accused of withholding important information from shareholders (namely that the ship was sinking) -- is another potentially hot category. Loan originators such as Countrywide are also viewed as prime targets for everyone from homeowners, to laid-off employees, to big Wall Street banks, all of whom are likely to claim they were the victims of deception.

The SubPrime Crisis Prompts Lawsuit Deluge As Losses Mount

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