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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