Foreclosure Lawsuits Skyrocket
An uptick in court cases challenging the foreclosure process sent the Mortgage Litigation Index in the second quarter to its highest level on record, dating to 2007.
Foreclosure litigation—which involves rulings in favor of borrowers or cases against rescue firms—jumped two-thirds in the second quarter (April 1 to June 30) compared to the first quarter of the year, according to the Mortgage Litigation Index, which monitors mortgage-related legal actions covered by MortgageDaily.com.
“Foreclosure litigation is on the rise as borrowers are increasingly challenging foreclosures because mortgagees continue to struggle proving mortgage ownership,” MortgageDaily.com’s Pat McManemin said in a statement. “Repurchase and secondary market litigation is also increasing as institutions fight over responsibility for the substantial losses suffered by the holders of these loans.”
Overall, the Mortgage Litigation Index reached its highest level during the second quarter, increasing 26 percent from the prior quarter and more than doubling its level from a year prior.