United Wholesale Mortgage (UWM), the nation’s largest wholesale mortgage lender, announced on March 4, 2021, that it would no longer do business with mortgage brokers who also worked with Rocket Mortgage (the online loan shopping and application tool offered by Quicken Loans) or with Fairway Independent Mortgage Company, claiming that those two rival companies “are hurting the wholesale channel.” UWM’s “us or them” ultimatum sparked a furor and no shortage of angst among the voluminous group…

Mortgage Crisis & Financial Services Watch

NFTs: Unique Assets Spur Legal Questions of First Impression

By Philip R. Stein

April 19, 2021

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Non-fungible tokens (NFTs) have gotten a lot of media attention of late, with breathless reports of multi-million dollar purchases of items one might never have expected to command such staggering sums. The objects sold have included digital artworks (such as drawings, music, and short videos) and even an autographed tweet by Twitter’s founder. Talk of an NFT “gold rush” abounds and does not seem overstated at the moment. But perhaps just as intriguing and unsettled…

Mortgage Crisis & Financial Services Watch

The SPAC Era Is Upon Us, and Related Litigation Is on The Rise

By Philip R. Stein

March 31, 2021

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Special Purpose Acquisition Companies (SPACs) have been in such widespread use over the last year or two that an uptick in SPAC-related litigation appears inevitable. Indeed, the increase is already beginning. After a brief overview of SPACs, this article will identify some of the key litigation risk areas for these entities and the individuals who govern them. SPACs have no commercial operations when they are formed. They are shell companies that exist to raise capital…

Mortgage Crisis & Financial Services Watch

Lehman Brothers Holdings Inc. Files New Adversary Proceedings Against Mortgage Brokers

By Philip R. Stein & Enza G. Boderone

March 16, 2021

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If you thought Lehman Brothers Holdings Inc. (“LBHI”) was done suing lenders as a result of its settlements with RMBS trustees years ago, think again. LBHI recently filed a new wave of lawsuits against approximately 60 defendants, mostly mortgage brokers, in the bankruptcy proceedings currently pending in the U.S. Bankruptcy Court for the Southern District of New York, and more may still be to come. As it did with the nearly 190 mortgage originators that…

Mortgage Crisis & Financial Services Watch

The Fed Raises Concerns about Corporate Debt

By Philip R. Stein & Kenneth Duvall

February 25, 2021

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We have previously written about the possible economic and litigation implications of mushrooming corporate debt. Now, the Federal Reserve has flagged some of those same concerns. In its semi-annual monetary policy report to Congress last Friday, the Fed expressed anxiety regarding the amount of debt taken on by American companies. Even “before the outbreak of the pandemic,” business debt was “already elevated.” Now, amidst the pandemic, “business leverage now stands near historical highs.” The Fed…

Mortgage Crisis & Financial Services Watch

ViacomCBS Seeks to Recover COVID-19-Related Losses from Insurer

By Philip R. Stein & Enza G. Boderone

February 23, 2021

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Business interruption insurance claims keep coming, cutting across a broad array of industries. The entertainment and media sectors are certainly not immune from pandemic-related losses. Last month, ViacomCBS became the latest entertainment entity to file such a claim, suing its insurer, Great Divide Insurance Co., for breach of contract and breach of the implied covenant of good faith and fair dealing. In the suit, filed in the U.S. District Court for the Central District of…

Mortgage Crisis & Financial Services Watch

Corporate Debt: Still Growing, and Still a Concern

By Kenneth Duvall

February 11, 2021

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As the pandemic began unfolding about a year ago, we wrote about the risk that the high volume of corporate debt might make it the next market bubble to burst. The issuance of corporate debt only accelerated in 2020 compared to 2019, growing by 17% and setting a new record in volume. S&P Global Ratings has predicted that corporate debt issuance in 2021 will remain robust, decreasing by only 3% compared to a frenetic 2020…

Mortgage Crisis & Financial Services Watch

Student Loan Defaults May Spark SLABS Litigation

By Philip R. Stein

January 21, 2021

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U.S. student loan borrowers owe approximately $1.7 trillion on their student loans. About 92% of that amount consists of federal student loans (debt owed to the U.S. government), with the remainder owed to a growing market of private lenders. Despite the fact that default rates have increased consistently since 2003, a substantial marketplace developed for student loan asset-backed securities (SLABS). That marketplace, and the world of student loans more generally, are now being buffeted by…

Mortgage Crisis & Financial Services Watch

Still Litigating the 2007-08 Financial Crisis: The Claims Keep Coming

By Philip R. Stein

December 17, 2020

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One would think that, as we approach 2021, litigation related to residential mortgage loans originated and sold well over a decade ago would be ancient history. Nevertheless, some suits filed years ago remain active, and, even more surprisingly (and disturbingly), new lawsuits related to loans sold prior to 2008 may be on the way. Here is a look at the current RMBS (residential mortgage-backed securities)-related litigation landscape.…

Mortgage Crisis & Financial Services Watch

What RMBS Litigation Might Tell Us about Future CMBS Lawsuits

By Philip R. Stein & Kenneth Duvall

November 3, 2020

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When mortgage-related litigation, including residential mortgage-backed securities (RMBS) lawsuits, erupted after the last financial crisis (the Great Recession of 2008), the litigants recognized that some of their disputes presented issues of “first impression.” That is, the parties’ arguments required judicial analysis and interpretation of contractual provisions and other issues that had not been litigated in a mortgage industry context. Even now, more than a decade later, some key issues remain subject to contradictory legal rulings…

Mortgage Crisis & Financial Services Watch

Business and legal issues affecting Banking, Finance and Lending | Credit | Securities and Investing | E-Commerce

Blog Authors

Mortgage Brokers File Class Action Against Leading Wholesale Mortgage Lender

NFTs: Unique Assets Spur Legal Questions of First Impression

The SPAC Era Is Upon Us, and Related Litigation Is on The Rise

Lehman Brothers Holdings Inc. Files New Adversary Proceedings Against Mortgage Brokers

The Fed Raises Concerns about Corporate Debt

ViacomCBS Seeks to Recover COVID-19-Related Losses from Insurer

Corporate Debt: Still Growing, and Still a Concern

Student Loan Defaults May Spark SLABS Litigation

Still Litigating the 2007-08 Financial Crisis: The Claims Keep Coming

What RMBS Litigation Might Tell Us about Future CMBS Lawsuits

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