Increased litigation is likely in the subprime mortgage arena, according to the head of the mortgage and lending litigation practice of Stradley Ronon Stevens & Young LLP, Philadelphia.Stradley Ronon cited a recent finding in a Credit Suisse report that nearly 25% of subprime mortgage deals issued last year had a delinquency rate of at least 8% as of December. "With rising default rates among subprime borrowers, lenders will be faced with the potential for increased litigation and an [increasingly] hostile regulatory environment," said Andrew K. Stutzman, the law firm's mortgage and lending litigation chair. "I think borrowers will look for any avenue they can to avoid bankruptcy or foreclosure, and some will choose litigation as a way to keep their house and credit intact. As I see it, mortgage companies will not sit idly by and settle these suits, but will defend them vigorously."
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The latest rate increases contributed to a 1% drop in purchases from the previous week and 15% annually, according to the Mortgage Bankers Association.
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The top five producers had an average dollar volume of VA and USDA loans of more than $35 million in 2023.
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The JPMorgan Chase CEO took aim Tuesday at the proposed Basel III endgame rules, hindrances to mergers and bureaucratic burdens. "I would love to have a more productive relationship with regulators, but I think it takes conversation," Dimon said.
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Many legal experts think the Supreme Court will rule in favor of the Consumer Financial Protection Bureau in a case challenging its funding. Such a ruling would unleash a flurry of litigation that has been on hold pending the outcome of the constitutional challenge.
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Prevention through new building standards and mapping technology aim to keep home insurance rates down but mortgage bankers see challenges.
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