United States: Credit Crisis Litigation Update: It Is Settlement Time

Last Updated: November 11 2013

Article by Dr. Faten Sabry, Eric Wang, and Joseph Mani*

INTRODUCTION

It has been more than six years since the onset of the credit crisis and we have documented for the first time in the past few months a significant increase in the number and size of settlements. Meanwhile, the pace of new filings has slowed as housing markets continue to improve and delinquencies and defaults decline. However, litigation arising from the credit crisis is far from over.

In this article, we discuss the recent trends of settlement activity and review some of the major settlements in credit crisis litigation.1 We also discuss mortgage settlements that are related to repurchase demands mainly between mortgage sellers and Fannie Mae and Freddie Mac.2 We then examine the current trends in filings, including the types of claims made, the nature of defendants and plaintiffs in the litigation, and the financial products involved.

Our main findings, which are discussed in greater detail below, include the following:

Findings Related to Credit Crisis-Related Settlements:

  • We have documented four categories of settlements: 1) settlements related to credit crisis securities lawsuits;3 2) other proposed settlements that are yet to be finalized; 3) settlements related to the repurchase demands by Fannie Mae and Freddie Mac; and 4) settlements with regulatory agencies that are related to foreclosure proceedings and other consumer finance issues.
  • Settlements of credit crisis-related litigation between 2007 and October 2013 total more than $32 billion, about 22% of which is related to settlements of securities class action lawsuits. The five largest securities litigation settlements to date total $19 billion (59% of total credit crisis litigation settlements). These are:

    • the tentative $13.0 billion settlement between JPMorgan and the US Department of Justice (DOJ) resolving several civil suits and investigations regarding mortgage securitizations in October 20134;
    • the $2.4 billion settlement in In re: Bank of America Corp. Securities, Derivative and ERISA Litigation in September 20125;
    • the $1.7 billion settlement in MBIA v. Countrywide et al. in May 20136;
    • the $1.1 billion settlement related to MBIA v. Morgan Stanley et al. and Morgan Stanley et al. v. MBIA et al. in December 20117; and
    • the $885 million settlement in FHFA (as conservator for Fannie Mae and Freddie Mac) v. UBS Americas Inc. et al. in July 2013.8
  • There are proposed settlements that are currently before the courts for approval to resolve claims related to representations and warranties for mortgage loan collateral in RMBS trusts.9 These include a proposed $8.5 billion settlement in relation to Countrywide that is currently being reviewed by Justice Barbara Kapnick of the New York State Supreme Court in an Article 77 proceeding, and a $7.3 billion proposed settlement (with an estimated recovery value of $672 million) relating to representation and warranty claims in respect of 392 RMBS trusts issued by entities related to Residential Capital LLC (ResCap) which is currently in Chapter 11 bankruptcy.10
  • Settlements related to mortgage repurchase claims by Fannie Mae and Freddie Mac have exceeded $18 billion to date.
  • Finally, the US government has recovered more than $34 billion in settlements of its claims against various banks in relation to allegations of improper foreclosure proceedings and other consumer finance issues such as fairness in mortgage lending.

Findings Related to Credit Crisis Litigation Filings:

  • There have been a total of 927 credit crisis filings from January 2007 through the end of June 2013, but the pace at which new cases are being filed has fallen sharply: only 30 new cases were filed in the first half of 2013, less than half of the 78 cases filed during the first half of 2012.
  • Consistent with the broad trend, filings of new credit crisis-related cases involving 10b-5 and ERISA allegations have declined markedly since 2007. In contrast, filings of breach of contract cases have increased since 2012.
  • In lawsuits filed in 2012 and the first half of 2013, the most commonly named defendants were issuers and underwriters and the allegations were mainly related to structured products such as asset- and mortgage-backed securities (ABS and MBS, respectively).

The impact of the record-setting regulatory settlements on private litigation remains to be seen and the litigation seems to be moving to a new phase.

CREDIT CRISIS LAWSUITS: METHODOLOGY USED TO COMPILE THE DATABASE

For the purposes of this article, we define "credit crisis lawsuits" as securities cases (i.e., cases in which the allegations relate to the purchase, ownership, or sale of securities) related to the downturn in the financial markets and mortgage markets that began in 2007. Our count of credit crisis lawsuits includes, among others, ERISA claims, shareholder derivative actions, individual state and federal cases, international cases, and state and federal shareholder class actions.11 We compile data from various sources including Law360, Bloomberg, Factiva, RiskMetrics Group/Securities Class Action Services, SEC filings, and case dockets from January 2007 to June 2013. If any cases are consolidated, the duplicate filings are removed and the data are adjusted.

THE SETTLEMENTS

Credit Crisis-Related Litigation Settlements: Record Activity with $19 Billion in Settlements for 2013, through October

Credit crisis-related litigation settlements from 2007 through October 2013 have exceeded $32 billion, of which 22% is related to securities class actions. In 2013, we have observed a significant acceleration in credit crisis-related litigation settlements with about $19 billion in settlements through the first 10 months (January to October). Of the $19 billion in settlements, $13 billion reflects the tentative settlement between JP Morgan and the DOJ. In 2013 through October, total settlements have increased 267% from total settlements in 2012 (17% when not including the JP Morgan / DOJ settlement). Exhibit 1 below presents the total dollar value of settlements, recorded by year of settlement.

Exhibit 2 shows the breakdown of settlements by type of litigation. The tentative $13 billion settlement between the US DOJ and JPMorgan makes up 40% of the $32 billion in total settlements and is by far the largest settlement to date.

There have been 547 decisions and settlements in 409 credit crisis cases from January 2007 through October 2013, which account for 44% of the credit crisis filings to date. NERA's database documents decisions and settlements associated with the credit crisis filings, but the decisions do not necessarily indicate the final status of these lawsuits. We have recorded 179 settlements12, 159 dismissals granted, 72 dismissals denied, 92 partial dismissals, 35 voluntary dismissals, and 10 other miscellaneous decisions.

Recent Credit Crisis-Related Litigation Settlements: A Review

Some of the largest settlements to date involve claims that were brought by the monoline insurers, investors in ABS or MBS securities, and shareholders. See Exhibit 3 for a list of the 10 largest settlements arising from credit crisis-related litigation.

The largest credit crisis-related litigation settlement occurred in October 2013, when JPMorgan reached a tentative settlement with the US DOJ regarding civil suits and investigations into JPMorgan's mortgage securitization business.13 The settlement includes $4.0 billion to settle claims brought by the Federal Housing Finance Agency regarding alleged misrepresentations about collateral underlying MBS notes purchased by Fannie Mae and Freddie Mac.14 The remainder will represent additional penalties as well as an allocation for consumer mortgage relief.15 The settlement, if approved by the court, will also resolve a case brought by New York Attorney Eric Schneiderman over mortgage securitization practices at Bear Stearns and EMC Mortgage.16

The second largest settlement is in In re: Bank of America Corp. Securities, Derivatives, and ERISA Litigation, with a value of $2.4 billion, announced in September 2012.17 The settlement was approved in April 2013.18 Bank of America shareholders alleged that Bank of America and its directors and officers made misleading statements about the financial health of Bank of America and Merrill Lynch at the time of its acquisition.19 According to a press release from Bank of America, the company "denie[d] the allegations and [entered] into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation."20

The third largest settlement is the $1.7 billion paid by Bank of America to MBIA Insurance Corporation in the MBIA v. Countrywide et al. case, announced on May 6, 2013 – nearly five years after it was originally filed.21 In that case, MBIA alleged misrepresentations and breaches of contract in connection with financial guarantees on fifteen RMBS sponsored by Countrywide. Specifically, MBIA alleged that Countrywide falsely represented the underlying mortgages and its underwriting standards to MBIA and that Countrywide refused to repurchase non-compliant mortgage loans.22 The $1.7 billion settlement consisted of approximately $1.6 billion in cash and the remittance of MBIA's senior notes (due 2034) with a principal amount totaling $137 million that Bank of America had previously held. In addition, Bank of America received fiveyear warrants to purchase shares of MBIA common stock and MBIA entered into a $500 million three-year secured revolving credit agreement with Bank of America. Bank of America also agreed to terminate outstanding credit default swap (CDS) agreements with MBIA and dismiss its claims in litigation regarding MBIA's restructuring. Based on a press release from MBIA, the settlement eliminated $7.4 billion of insured exposure.23

Cases brought by MBS and ABS investors have been very active, with 8 such cases settling in 2012, and 17 settling in 2013 through October for a total value of $6.6 billion.24 While the allegations in these cases vary, a large majority of the cases involved claims under Sections 11 and 12 of the Securities Act of 1933. Much of the recent settlement activity in 2013 has also occurred in cases where the plaintiffs are monoline insurers of MBS and ABS securities. In addition to the $1.7 billion settlement between MBIA and Countrywide, 18 similar cases with monoline insurers settled in 2013 through October. See Exhibit 4 for a list of these cases.

Other Major Credit Crisis Settlements

In addition to settlements directly related to securities litigation (i.e., those that resolved a pre-existing securities lawsuit), there have been other major credit-crisis related settlements. We discuss these settlements below.

Proposed Settlements for Countrywide MBS and ResCap MBS

In addition to the settlements arising from credit crisis securities litigation, there is the proposed $8.5 billion Countrywide settlement currently being reviewed by Justice Barbara Kapnick of the New York State Supreme Court in an Article 77 proceeding. In June 2011, institutional investors that held certificates in these trusts requested that Bank of New York Mellon (BNYM) enter into a settlement with Countrywide and Bank of America. BNYM subsequently filed a petition in the Supreme Court of the State of New York to begin a proceeding under Article 77 of the Civil Practice Law and Rules (CPLR) to request judicial approval of the proposed settlement.25 The proposed settlement, if approved by the Court, would resolve repurchase exposure, among other issues, for 530 Countrywide-issued first-lien RMBS trusts with an original principal balance of $424 billion.

Another similar proposed settlement regarding representation and warranty claims is the $7.3 billion settlement for over 392 RMBS trusts issued by entities related to Residential Capital LLC (ResCap). In June 2012, ResCap submitted a motion in its bankruptcy proceeding to approve an $8.7 billion settlement, which it had negotiated with a group of institutional investors.26 In a May 2013 motion submitted by ResCap to enter into a plan support agreement, the claim amount was revised to $7.3 billion, with an estimated recovery value of $672 million.27

Strong Settlement Activity for Repurchase Demands by Fannie Mae and Freddie Mac

In addition to the settlements described above, Fannie Mae and Freddie Mac have recovered more than $18 billion from several financial institutions to resolve mortgage repurchase claims. These recoveries include the following:

  • A $1.1 billion settlement agreement reached in October 2013 between JPMorgan and Fannie Mae and Freddie Mac regarding mortgage repurchase claims.28
  • A $438 million settlement agreement reached in October 2013 between SunTrust and Fannie Mae and Freddie Mac regarding mortgage repurchase claims.29
  • An $869 million settlement reached in September 2013 between Wells Fargo and Freddie Mac, resolving nearly all repurchase claims related to loans sold to Freddie Mac through 2008.30
  • A $395 million settlement reached in September 2013 between Citigroup and Freddie Mac, regarding repurchase claims for about 3.7 million loans sold to Freddie Mac from 2000 to 2012.31
  • A $968 million settlement reached in July 2013 between Citigroup and Fannie Mae resolving repurchase claims related to 3.7 million residential first-lien mortgages.32
  • An $11.6 billion settlement reached in January 2013 between Bank of America and Fannie Mae, resolving Fannie Mae's repurchase claims related to mortgages sold to Fannie Mae between 2000 and 2008. The settlement also included the payment of fees related to foreclosure delays by Bank of America.33
  • A $2.8 billion settlement reached in January 2011 between Bank of America and Fannie Mae and Freddie Mac ($1.5 billion to Fannie Mae and $1.3 billion to Freddie Mac), relating to mortgage repurchase demands.34

Settlements Related to Mortgage Lending and Servicing

In addition to the settlements in the securities litigation and repurchase demands discussed above, there have been over $34 billion of settlements between the US government and various financial institutions, related to foreclosure procedures and consumer finance issues such as fairness in mortgage lending. On January 7, 2013, the Office of the Comptroller of the Currency and the Federal Reserve Board announced an $8.5 billion agreement with various banks such as Bank of America and Citibank regarding foreclosure practices and mortgage loan servicing deficiencies.35 The agreement was subsequently increased to $9.3 billion in February 2013, with $3.6 in cash payments and $5.7 in homeowner assistance, including loan modifications and forgiveness of deficiency judgments.36 In February 2012, Bank of America, Citigroup, JPMorgan, Wells Fargo, and Ally Financial had agreed to a $25 billion settlement with 49 state attorneys general and federal agencies such as the US Department of Justice regarding mortgage loan servicing and foreclosure problems. The settlement included approximately $5 billion in cash penalties, with the remaining $20 billion to be provided as relief to homeowners.37 In December 2011, the US Department of Justice also settled with Bank of America and Countrywide over alleged mortgage lending discrimination from 2004 to 2008, providing $335 million in compensation.38

Summary of Settlement Activity

From 2007 through October 2013, defendants have agreed to pay a total of $32 billion to settle various credit crisis-related lawsuits. This total does not include the proposed $8.5 billion settlement of Countrywide MBS litigation and the $7.3 billion proposed settlement ($672 million estimated recovery value) in the ResCap bankruptcy. In addition, financial institutions have settled repurchase demands by Fannie and Freddie for a total of $18 billion. Settlements and agreements between the US government and various banks and servicers related to mortgage lending and loan servicing issues arising from the credit crisis have exceeded $34 billion.

NEW FILINGS: NEW FILINGS HAVE DECLINED AS HOUSING MARKETS SHOW SIGNS OF RECOVERY

There have been a total of 927 credit crisis-related filings over the period January 2007 through the end of June 2013, with 158 filings in 2012 and 30 filings in the first half of 2013 (60 annualized). In terms of class action matters, there were eight filings in 2012 and two filings in 2013 through June (four annualized). For non-class action matters, there were 150 filings in 2012 and 28 filings in 2013 through June (56 annualized).39 As the housing markets have started to show signs of improvement, leading to fewer delinquencies and defaults, the pace of new filings has fallen to a fraction of that seen in prior years. This trend is illustrated in Exhibit 5 which presents credit crisis filings by quarter, divided into securities class action lawsuits and other types of lawsuits, along with the seasonally adjusted Case-Shiller national home price index indexed to 1Q2007.

Credit Crisis-Related Breach of Contract Lawsuits Increased Sharply Since 2012

We classify filings by the type of claims. Categories include cases involving claims pursuant to: Rule 10b-5, Sections 11 and 12 from the Securities Act of 1933, the Employee Retirement Income Security Act of 1974 (ERISA), breaches of fiduciary duty, and breaches of contract. Many cases involve allegations under more than one of these statutes. Exhibit 6 below presents the share of annual filings by type of claims from 2007 through the first half of 2013.

Rule 10b-5, promulgated under Section 10b of the Securities Exchange Act of 1934, governs investors who purchased or sold securities of a company which allegedly made "untrue statements of a material fact" or "omit[ted] to state a material fact necessary in order to make the statements... not misleading."40 Credit crisis-related 10b-5 lawsuits have decreased from 38 cases in 2007 (or 48% of the credit crisis cases filed in that year) to 11 cases (or 7% of cases) in 2012 and 4 cases (or 13% of cases) in the first half of 2013.

Sections 11 and 12 claims are brought pursuant to the Securities Act of 1933 for alleged material misstatements or omissions in a registration statement or prospectus, respectively. Many of the cases involving claims under Sections 11 and 12 relate to registration statements or prospectuses for mortgage pass-through securities, mutual fund shares, and secondary public stock offerings. Such claims were made in 15 cases (or 19% of cases) filed in 2007 and 30 cases (or 19% of cases) in 2012, but were made in only one of the 30 cases (or 3% of cases) filed so far in the first half of 2013.

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal statute that governs the benefits of pension plans and employee benefit rights. The majority of ERISA cases involve suits brought by plan participants against asset managers, or cases against a company and its executives for offering the company's stock to plan participants. Credit crisis-related claims alleging a violation of ERISA peaked in 2008 with 18 filings, or 9% of cases filed in that year. None of the credit crisis-related claims filed in 2012 or the first half of 2013 involve ERISA claims.

There were 30 cases involving allegations of breaches of fiduciary duty (or 38% of cases) filed in 2007, 7 cases (or 4%) filed in 2012, and 3 cases (or 10%) filed in the first half of 2013. Allegations of breaches of contract surged from 12 cases (or 15%) filed in 2007 to 65 cases (or 41%) filed in 2012 and 11 cases (or 37%) filed in the first half of 2013, in large part due to filing activity related to investors and insurers of ABS and MBS securities alleging contract claims.

Issuers and Underwriters Continue to Be the Most Frequently Named Defendants in Recent Filings

We classify the primary defendants in the credit crisis filings by reviewing complaints and other legal documents. Our classification of the defendants is based on the allegations and the role of the defendants in each case. For example, one firm may be categorized as an issuer/underwriter in a particular lawsuit for packaging and selling mortgage-backed securities. The same firm may then be categorized as a broker/dealer for marketing and selling auction-rate securities ("ARS") to an investor. Asset management firm defendants may include hedge funds, private equity firms, and investment advisors, among others. Insurers include mortgage and bond insurers. We classify the defendants as securities issuers/underwriters, asset management firms, mortgage lenders, insurers, home builders, broker/dealers, rating agencies, REITs, or others. A breakdown of defendant types by filing year is presented in Exhibit 7.

There has been a noticeable shift in the type of defendants as credit crisis-related litigation has progressed. In 2007, mortgage lenders, home builders, and REITs were named as defendants in 43% of filings. In 2008, mortgage lenders, home builders, and REITs were named in only 20% of filings. Such businesses were named as defendants in just 3% of filings in 2012 and 2013 through June.

Although securities issuers/underwriters were defendants in only 24% and 23% of filings in 2007 and 2008, respectively, filings against these types of defendants increased in both 2009 and 2010. In 2009, securities issuers/underwriters were named in 33% of the filings. In 2010, 44% of filings targeted securities issuers/underwriters, in part due to the wave of litigation against Goldman Sachs and its involvement in synthetic CDOs. By 2011 and 2012, the percentage of credit crisis litigation filed against securities issuers / underwriters rose to 60% and 75%, respectively. In the first half of 2013, 43% of filings were against securities issuers / underwriters.

Filing of Shareholder Suits Has Decreased Since 2008; Lawsuits by MBS/ABS Investors Maintain Strong Share of Activity in 2012 and 2013YTD

We also classify the types of plaintiffs in the credit crisis filings as shareholders, ARS investors, MBS/other investors, trustees on behalf of investors, plan participants, insurers, swap contract claimants, government/regulators, and other plaintiffs. A breakdown of filings by type of plaintiff by filing year is shown in Exhibit 8.

We define shareholders as common stock owners. ARS investors are those who invested in long-term variable-rate instruments (usually municipal or corporate bonds) whose interest rates are reset through auctions. MBS/other investors are those who invested in MBS, ABS, preferred securities, corporate bonds, mutual funds, and money market funds. Plan participants are generally employees that file ERISA claims. Swap contract claimants are most commonly parties that bring suits regarding disputes over CDS. The government/regulator claims include cases brought by the SEC, state attorneys' general, cities, and municipalities.

Similar to the trends in the types of defendants named in credit crisis-related cases, the plaintiffs involved in cases have shifted towards investors in MBS and other mortgage-related securities. The share of cases involving MBS/other investors has increased over time, with 39% of cases in 2010, 60% of cases in 2011, 63% of cases in 2012, and 43% of cases in the first half of 2013. Insurers, in particular those who insured MBS and ABS, have also increased filing activity, from 8% of cases in 2010 to 13% of cases in the first half of 2013. See Exhibit 8.

Most Recent Filings Relate to ABS and MBS

We also classify credit crisis filings according to the type of product or security at issue in the case. These categories are not mutually exclusive and, in many instances, multiple types of securities are involved in each filing. Cases filed in 2007, which tended to involve lenders, originators, and home builders, largely involved claims related to increased accounting provisions (i.e., increases in reserves) for mortgage loans and mortgage loan charge-offs due to impairment. In fact, in 2007, 38% of credit crisis claims involved allegations relating to mortgage loans. By comparison, in 2012, only 3% of claims involved mortgage loans. In the first half of 2013, 13% of claims involved mortgage loans.42 The majority of recent credit crisis securities lawsuits involve products such as ABS/MBS. In 2012 and the first half of 2013, 81% and 80% of claims involved ABS/MBS, respectively. See Exhibit 9.

CONCLUSION

We have documented a significant increase in settlement activity related to the credit crisis litigation as well as settlements of Fannie Mae and Freddie Mac's repurchase demands in recent months. Notwithstanding, many cases remain active and continue to be litigated. Given the recent surge in regulatory settlements and investigations against financial institutions on various issues related to the credit crisis, it is not clear that we have seen the end of this litigation.

Footnotes

* The authors would like to thank Brad Heys, Drew Claxton, and Sungi Lee for their insightful comments. All errors and omissions are ours.

1 See Credit Crisis Lawsuits: Methodology Used to Compile the Database Section on page 3.

2 Mortgage repurchase demands are typically made by purchasers of whole loans or investors in mortgage backed securities, for example as a method of remedying alleged defects or breaches in mortgage loan quality. In a repurchase, the mortgage loans are bought back by the mortgage seller.

3 The other listed types of settlements are credit crisis-related, but we do not classify them in our database as directly related to securities lawsuits.

4 Devlin Barrett, "JPMorgan Reaches $13 Billion Tentative Deal with DOJ," Dow Jones Top News & Commentary (October 21, 2013).

5 Consolidated Amended Class Action Complaint, In re: Bank of America Corp. Securities, Derivative, and ERISA Litigation, No. 09-MDL-2058 (S.D. N.Y.) filed September 25, 2009.

6 Complaint, MBIA Insurance Corp. v. Countrywide Home Loans Inc. et al., No. 602825-2008 (N.Y. Sup.) filed September 30, 2008.

7 Complaint, MBIA Insurance Corp. v. Morgan Stanley et al., No. 29951-10 (N.Y. Sup.) filed December 6, 2010. Also Complaint, Morgan Stanley et al. v. MBIA et al., No. 9601475 (N.Y. Sup.) filed May 13, 2009.

8 Complaint, Federal Housing Finance Agency as Conservator for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation v. UBS Americas Inc. et al., No. 1:11-CV-05201 (S.D. N.Y.) filed July 27, 2011.

9 Because these settlements did not resolve pre-existing cases, but rather claims that had not been brought in court, we have accounted for them separately in our credit crisis litigation settlement totals.

10 The $7.3 billion reflects a settled upon, allocated amount in the ResCap bankruptcy proceeding for RMBS trust claims related to representation and warranty and cure claims. Because the amount of claims exceeds the available distributable funds in the ResCap bankruptcy proceeding, the proposed settlement value will result in a smaller recovery value. See Annex I of the Debtors' Motion for an Order Under Bankruptcy Code Section 105(A) and 363(B) Authorizing the Debtors to Enter Into and Perform Under a Plan Support Agreement with Ally Financial Inc., the Creditors' Committee, and Certain Consenting Claimants, In re: Residential Capital LLC, et al., No. 12-12020 (Bankr. S.D.N.Y.) filed May 23, 2013.

11 We do not include cases related to predatory lending, consumer finance, foreclosure proceedings, Ponzi schemes, or arbitration claims.

12 We record a settlement for each case that is settled, i.e., if a settlement agreement covers multiple cases, a settlement is counted for each case.

13 Tom Schoenberg, Dawn Kopecki, Hugh Son, and Dakin Campbell, "JPMorgan Said to Reach Record $13 Billion U.S. Settlement," Bloomberg (October 20, 2013). See also Chris DiMarco, "J.P. Morgan Closing in on Agreement with DOJ over Mortgage Probes," Inside Counsel (October 21, 2013). See also Clea Benson and Dawn Kopecki, "JPMorgan to Pay $5.1 Billion to Settle Mortgage Claims," Bloomberg (October 25, 2013).

14 Complaint, Federal Housing Finance Agency as Conservator for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation v. JPMorgan Chase & Co. et al, No. 11-cv- 06188 (S.D.N.Y.) filed September 2, 2011.

15 Tom Schoenberg, Dawn Kopecki, Hugh Son, and Dakin Campbell, "JPMorgan Said to Reach Record $13 Billion U.S. Settlement," Bloomberg (October 20, 2013). See also Chris DiMarco, "J.P. Morgan Closing in on Agreement with DOJ over Mortgage Probes," Inside Counsel (October 21, 2013).

16 Complaint, People of the State of New York by Eric T. Schneiderman v. J.P. Morgan Securities LLC et al., No. 451556/2012 (N.Y. Sup.) filed October 1, 2012.

17 The case is In re: Bank of America Corp. Securities, Derivative, and ERISA Litigation, No. 09-MDL-2058 (S.D. N.Y.).

18 The Bank of America Securities Litigation website, available at: http://www.boasecuritieslitigation.com/.

19 Consolidated Amended Class Action Complaint, In re: Bank of America Corp. Securities, Derivative, and ERISA Litigation, No. 09-MDL-2058 (S.D. N.Y) filed on September 25, 2009.

20 Bank of America, "Bank of America Reaches Settlement in Merrill Lynch Acquisition-Related Class Action Litigation," September 28, 2012.

21 The case is MBIA Insurance Corp. v. Countrywide Home Loans Inc. et al., No. 602825-2008 (N.Y. Sup.).

22 Complaint, MBIA Insurance Corp. v. Countrywide Home Loans Inc. et al., No. 602825-2008 (N.Y. Sup.) filed September 30, 2008.

23 MBIA, "MBIA Announces Comprehensive Settlement with Bank of America," May 6, 2013.

24 This includes $4.0 billion of the tentative JPMorgan / DOJ settlement that has reportedly been set aside for the FHFA litigation matter. See Clea Benson and Dawn Kopecki, "JPMorgan to Pay $5.1 Billion to Settle Mortgage Claims," Bloomberg (October 25, 2013).

25 Verified Petition at 4, 5, In the matter of the application of The Bank of New York Mellon (as Trustee under various Pooling and Servicing Agreements and Indenture Trustee under various Indentures), for an order pursuant to CPLR §7701, seeking judicial instructions and approval of a proposed settlement, No. 651786/2011 (N.Y. Sup.) filed June 29, 2011.

26 Debtors' Motion Pursuant to Fed. R. Bankr. P. 9019 for Approval of the RMBS Trust Settlement Agreements, In re: Residential Capital LLC, et al., No. 12-12020 (Bankr. S.D.N.Y.) filed June 12, 2012.

27 The $7.3 billion reflects a settled upon, allocated amount in the ResCap bankruptcy proceeding for RMBS trust claims related to representation and warranty and cure claims. Because the amount of claims exceeds the available distributable funds in the ResCap bankruptcy proceeding, the proposed settlement value will result in a smaller recovery value. See Annex I of Debtors' Motion for an Order Under Bankruptcy Code Section 105(A) and 363(B) Authorizing the Debtors to Enter Into and Perform Under a Plan Support Agreement with Ally Financial Inc., the Creditors' Committee, and Certain Consenting Claimants, In re: Residential Capital LLC, et al., No. 12-12020 (Bankr. S.D.N.Y.) filed May 23, 2013.

28 Clea Benson and Dawn Kopecki, "JPMorgan to Pay $5.1 Billion to Settle Mortgage Claims," Bloomberg (October 25, 2013).

29 Of the $438 million, $170 million was credited as having already been repurchased by SunTrust. SunTrust also reached a $968 million settlement with the US Department of Housing and Urban Development and Department of Justice for claims regarding SunTrust's origination of FHA-insured mortgage loans and its mortgage servicing and origination practices. See SunTrust Banks, Inc. Form 8-K, October 10, 2013.

30 Wells Fargo, "Wells Fargo Reaches Agreement Resolving Freddie Mac Repurchase Demands on Loans Sold Prior to 2009," September 30, 2013.

31 Citigroup, "Citigroup Announces Agreement with Freddie Mac to Resolve Potential Future Mortgage Repurchase Claims," September 25, 2013.

32 Citigroup, "Citigroup Announces Agreement with Fannie Mae to Resolve Potential Future Mortgage Repurchase Claims," July 1, 2013.

33 Bank of America, "Bank of America Announces Settlement with Fannie Mae to Resolve Agency Mortgage Repurchase Claims on Loans Originated and Sold Directly to Fannie Mae Through December 31, 2008," January 7, 2013. The Federal Housing Finance Agency also allowed the transfer of the mortgage servicing rights from Bank of America to other servicers, related to about 1 million mortgage loans.

34 Bank of America, "Bank of America Announces Fourth Quarter Actions with respect to Its Home Loans & Insurance Business," January 3, 2011.

35 Office of the Comptroller of the Currency, "Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance," January 7, 2013.

36 Office of the Comptroller of the Currency, "Amendments to Consent Orders Memorialize $9.3 Billion Foreclosure Agreement," February 28, 2013.

37 Nick Timiraos, Dan Fitzpatrick, and Ruth Simon, "U.S., Banks Agree on Foreclosure Pact," Wall Street Journal, February 9, 2012. Dawn Kopecki, David McLaughlin, and Lorraine Woellert, "U.S. Mortgage Servicers in $25B Settlement," Bloomberg, February 10, 2012.

38 Department of Justice, "Justice Department Reaches $335 Million Settlement to Resolve Allegations of Lending Discrimination by Countrywide Financial Corporation," December 21, 2011.

39 Cases that bring ERISA claims are included in the non-class action category.

40 Rule 10b-5, § 240.10b-5, Employment of Manipulative and Deceptive Devices.

41 Percentages reflect the portion of credit crisis filings that contain a given type of claim for a given filing year. A filing may contain multiple claims.

42 Cases involving alleged misrepresentations about the collateral of ABS and MBS notes are classified under ABS & MBS.

43 Percentages reflect the portion of credit crisis filings that contain a given product type for a given filing year. A filing may contain multiple product types.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions