January 05, 2009

Partners Katya Jestin and Monica R. Pinciak-Madden address the landscape of lawsuits which have resulted as a consequence of the subprime mortgage crisis. Ms. Jestin and Ms. Pinciak-Madden provide an overview of the subprime civil litigation, dividing it into five main categories: contract actions against loan originators, securities suits, ERISA beneficiary suits, suits against credit ratings agencies, and consumer-related suits. According to the authors, “the recognition by financial services companies of billions of dollars in future losses, recent spikes in unemployment, the edging up of bankruptcies, and the continuing rise in both loan delinquencies and foreclosures all point to a more litigious future for companies connected to the subprime machine.” They also project that “as the crisis unfolds, criminal litigation, like civil litigation, will likely spread and take on new shape.” Associates John C. Roberts and Justin C. Steffen assisted in the drafting of this article.