Navigant Consulting has put out a press release with respect to its latest study, entitled Third Quarter 2008 Update: Breaking New Ground, which details the unprecedented rise in subprime mortgage-related litigation.
Besides the eye-popping statistics showing the exponential rise in subprime mortgage-related filings over the last 21 months–far exceeding those from the Savings and Loan Crisis to make the Subprime Meltdown the most litigated financial crisis in history–the study provides a window into the pervasiveness of this financial disaster. According to the release, Navigant’s study found that “virtually every participant in the subprime collapse is being sued. Fortune 1000 companies were named in 56 percent of cases. Mortgage Bankers and Loan Correspondents represent the highest percentage of defendants (32 percent) but defendants also include mortgage brokers, lenders, appraisers, title companies, homebuilders, servicers, issuers, underwriting firms, bond insurers, money managers, public accounting firms and company directors and officers, among others.”
This study should represent a wakeup call to anyone who still believes this crisis is an isolated problem. Due to the complex nature of the mortgage securitization process, which required the participation of dozens of players (see graphic at the top of this page), combined with the liquidity crisis spawned by the collapse of the market for such securities, few (save, perhaps, expert witnesses and litigators involved in the cleanup) will be immune to the fallout from the subprime dilemma.
For more on this study, see my post from last week.