From Sarah Murphy at Bliss PR:
Subprime Lawsuits: How to Defend Yourself
22/05/2008 - 15:02
"The pace of subprime-related litigation continues with no apparent end in sight as more and more lawsuits are filed against mortgage lenders, Wall Street firms that packaged and resold the mortgage loans into bonds and mortgage backed securities (“MBSâ€), and companies that invested in MBS. Many of the mortgage lender lawsuits are directed at underwriting practices and accounting estimates, including estimates related to allowance for loan losses, valuation of mortgage servicing rights and residual securities, and liabilities for loan repurchases.
22/05/2008 - 15:02
"The pace of subprime-related litigation continues with no apparent end in sight as more and more lawsuits are filed against mortgage lenders, Wall Street firms that packaged and resold the mortgage loans into bonds and mortgage backed securities (“MBSâ€), and companies that invested in MBS. Many of the mortgage lender lawsuits are directed at underwriting practices and accounting estimates, including estimates related to allowance for loan losses, valuation of mortgage servicing rights and residual securities, and liabilities for loan repurchases.
What companies can do to defend themselves against these lawsuits depends on how they arrived at their accounting estimates and whether they can demonstrate that good faith efforts were made to determine those estimates based on information available at the time. Anthony Lendez, CPA, CFE, is a partner with BDO Consulting, a division of BDO Seidman, LLP, and can speak to the following best practices for the various defendants of these lawsuits:"
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