This year’s barrage of subprime-related lawsuits has reversed an 18-month decline in the number of shareholder class action lawsuits, according to research by NERA Economic Consulting. Federal filings for 2007 are expected to total 207, 58% higher than last year’s 131 filings.
Last year no subprime-related class actions were filed. The filings picked up in the second half of the year; by Dec. 15, the total number of subprime mortgage lender shareholder class actions had more than quadrupled compared to the first half of 2007. As the subprime mortgage market continues to feel the pain into 2008, more litigation will likely follow, wrote analysts.
In addition to the increasing number of lawsuits, investor losses and the resulting average settlements have hit a new high. In 2007 the average settlement was $33.2 million, jumping up from $22.7 million in 2006.