Move My Realty - Real Estate News

Credit Crisis Blamed for Spike in Fraud Lawsuits
A new study by Stanford University and Cornerstone Research reveals that troubled housing investments drove much of the increase in class-action lawsuits in 2007.

Class-action fraud suits rose by more than 40 percent, and most of them were filed in the second half of the year as reports of tightened credit access and deepening troubles with housing investments shook the markets.

Targets of the class-action lawsuits include 47 financial services businesses that have suffered huge losses on subprime mortgages. The losses posted by banks and lenders in the coming months likely will lead to more disputes over housing investments. Also, several states, the Securities and Exchange Commission, and federal prosecutors are launching investigations into the actions of brokers, lenders, credit-rating agencies, and financial institutions regarding such investments.

Source: Washington Post, Carrie Johnson (01/04/08)

© Copyright 2008 Information Inc.

http://www.realtor.org/RMODaily.nsf/pages/News2008010702?OpenDocument