Philip R. Stein

Subscribe to all posts by Philip R. Stein

Minor League Baseball Teams Seek Major Victories In Suits Against Insurance Companies

Major League Baseball (MLB) is scheduled to begin its COVID-delayed season on July 23, but the MLB teams’ Minor League counterparts will have no 2020 campaign. Their season has been canceled. Many Minor League teams are now seeking victories in court, suing their insurers for denying them coverage under their insurance policies for business interruption … Continue Reading

Supreme Court Rules CFPB’s Structure Must Be Modified

While declining to rule that the Consumer Financial Production Bureau (CFPB) itself is unconstitutional — a position taken by many of the agency’s opponents since it began operating in July 2011 — the U.S. Supreme Court ruled today, June 29, 2020,that the CFPB’s structure violates the Constitution. In a 5-4 decision, the Court held that … Continue Reading

Florida’s Uniform Commercial Real Estate Receivership Act – A New Statutory Framework for Receiverships

In March, the Florida Legislature passed CS/HB 873, approving the Uniform Commercial Real Estate Receivership Act (“UCRERA”).  First drafted in 2015 by the Uniform Law Commission, UCRERA has already been adopted by seven states: Arizona, Maryland, Michigan, Nevada, Oregon, Tennessee, and Utah.  If Governor DeSantis signs the bill, UCRERA will become effective July 1, 2020, … Continue Reading

Proposed PPP Flexibility Act Would Relax Certain Current Loan Requirements

Businesses that receive forgivable loans through the Paycheck Protection Program (PPP) would get additional time and greater flexibility to make use of those funds under proposed legislation approved last week by the U.S. House of Representatives. By a 417-1 vote, the House passed on for the Senate’s consideration the PPP Flexibility Act. That Act, if … Continue Reading

As Businesses Re-open, Congress Mulls Shielding Them From Liability

Talk of a broader “re-opening” of the economy has led to a fierce debate in Congress about whether it would be advisable to include, as part of a new COVID-19 legislative relief package, provisions creating certain immunities from potential liability for businesses that re-open. Specifically, some U.S. senators want to insulate companies from liability for … Continue Reading

Government-Mandated Closures, Direct Physical Loss, and the Explosion of Litigation Seeking Business Interruption Insurance Coverage

On April 20, 2020, Colorado Governor Jared Polis laid out an ambitious plan to dramatically reduce the restrictions on personal movement and business operations created by last month’s “Stay-at-Home” Order.[1] Dubbed the “Safer-at-Home” Order, this modification (and others like it in various other states) provided a glimmer of hope to citizens who have been largely … Continue Reading

Lawsuits Allege Preferential or Self-Serving Disbursement of PPP Funds by Major Banks

In response to the severe economic disruptions caused by COVID-19, Congress took unprecedented fiscal steps to inject liquidity into the economy. One of Congress’ most significant actions was the CARES Act, which included the $349 billion Paycheck Protection Program (PPP), providing forgivable loans to businesses to cover payroll expenses.[1] However, the program ran out of money … Continue Reading

A Resurgence of Residential Mortgage Repurchase Claims on the Horizon

A surge in repurchase claims against mortgage originators may be imminent as aggregators and servicers face nonpayment of debt obligations and liquidity shortfalls resulting from an increase in residential mortgage loans put in forbearance. In the coming weeks, it is likely that an unprecedented number of borrowers will avail themselves of mortgage relief provided under … Continue Reading

COVID-19 Sparks Rapid Rise in “Cancellation” and “Refund” Litigation

A proposed class action filed in federal court in California on April 20 demands refunds for all fans who purchased tickets to Major League Baseball (MLB) games that have been postponed indefinitely due to the coronavirus pandemic. The suit, filed against MLB and online ticket sellers StubHub, Ticketmaster, Live Nation, and Last Minute Transactions, may … Continue Reading

Hunter or Hunted? Mortgage Industry Players Should Consider Their Options

In the mortgage industry, as in many others, uncertainty abounds as companies attempt to adjust to the “current normal.” One thing residential mortgage loan originators and servicers believe is clear, however, is that they are being unfairly squeezed from several directions during this time of especially fragile economic conditions. Recent government actions, new legislative mandates, … Continue Reading

A Glut of “Opportunistic” Margin Calls: Are Creditors Moving Too Quickly to Seize Assets?

What can companies expect from their funding sources as COVID-19 does damage to the economy? In at least some instances, perhaps, opportunistic attempts by lenders to illegally take control of business assets. A real estate investment trust (REIT) in New York alleges in a new lawsuit that it has already fallen victim to that type … Continue Reading

Coronavirus and the Next Possible Financial Crisis: Corporate Debt

As the world grapples with the health threat posed by the novel coronavirus (COVID-19), the secondary threats of the coronavirus—including economic and financial consequences—have come into clear view. Markets in the United States and the broader world tanked last week, including the worst day for the Dow Jones Industrial Average since “Black Monday,” October 19, … Continue Reading

RMBS Litigation Relating to Loans Sold Prior to 2008: Are We Finally Nearing The End?

The years since the 2007–2008 financial crisis have been marked with milestone settlements of claims against the major mortgage “aggregators” (sometimes also known as “investors” in the mortgage purchasing context), who then became “securitizers” or “sponsors” with respect to the loans that they purchased. In the years immediately following the crisis, aggregators often first faced … Continue Reading

With Consumer Protection Class Actions On the Rise, Is the Financial Services Industry in the Crosshairs?

Lawyers or business people who feel they have been hearing about a lot more consumer protection class actions lately have good reason for that feeling. A recent report by Lex Machina, part of LexisNexis, highlights an extraordinary increase in federal consumer protection class actions over the last decade. The number of such class actions almost … Continue Reading

Appellate Court Tells CitiMortgage It Can’t Force “Repurchase” Of What No Longer Exists

A recent decision by the United States Court of Appeals for the Eighth Circuit offers some vindication for mortgage companies still facing “repurchase” demands made by the banks to which they sold residential mortgages in the years leading up to the financial crisis that began in 2007 and accelerated in 2008.  In CitiMortgage, Inc. v. … Continue Reading

Jurisdictional Lessons from Mt. Gox Cryptocurrency Litigation

Last week, on the heels of a significant decline in Bitcoin prices, Forbes reported that China’s Central Bank is set to launch the world’s first state-backed cryptocurrency. The cryptocurrency will be made available initially to seven of China’s largest financial institutions, including three banks and two financial technology companies (including Alibaba).  It is planned to … Continue Reading

CFPB Decision on “GSE Patch” Revives Debate About Prudent Underwriting

The Consumer Financial Protection Bureau (CFPB) recently announced that it will allow the so-called “GSE patch” to expire in January 2021.[1] This patch permits Government-Sponsored Entities Fannie Mae and Freddie Mac to buy loans even though the borrower’s debt-to-income (“DTI”) ratio exceeds the standard limit of 43%.[2] The CFPB’s decision revives a long-standing debate about … Continue Reading

From RMBS to SLABS: Is History Repeating Itself?

The fallout from the last financial crisis and recession is far from over. More than a decade after the demise of Lehman and Bear Stearns, among others, litigation continues related to alleged deficiencies in mortgage loans securitized as part of residential mortgage-backed securities (RMBS) offerings. Our firm thus remains extremely busy with, for example, defense … Continue Reading

New Second Circuit Statute of Limitations Ruling A Benefit to Loan Originators, Brokers

As originators and brokers of mortgage loans continue to get served with new lawsuits (or threatened with potential suits) related to loans that they conveyed to aggregators prior to the financial crisis of 2008, questions almost inevitably arise as to how this is even possible: aren’t such claims time-barred under the applicable statute of limitations? … Continue Reading

New York High Court Rules on Statute of Limitations

Over the last several years, we have posted several times about whether the statute of limitations bars remedies against lenders (and sometimes sponsors and trustees) of residential mortgages. (See here, here, and here). One of the most important cases in this area has been ACE Sec. Corp., Home Equity Loan Trust, Series 2006–SL2 v. DB … Continue Reading

Lehman Brothers Seeks to Expand Lawsuits Against Loan Originators

Last week, Lehman Brothers Holdings Inc. (“LBHI”) filed two new motions in its ongoing Southern District of New York Bankruptcy Court litigation against approximately 130 loan originators and brokers: (1) an Omnibus Motion for Leave to File Third Amended Complaints Pursuant to Rule 7015 of the Federal Rules of Bankruptcy Procedure (“Motion for Leave to … Continue Reading

Chase Lets Loose a Barrage of New Indemnification Demand Letters

Ten years after the financial crisis, mortgage companies and regional/local banks are still getting hit with new breach of contract and indemnification claims related to loans sold before the crisis. The latest case in point involves demand letters that JPMorgan Chase is sending out to lenders throughout the country. The letters pertain to loans sold by originators … Continue Reading
LexBlog

This website uses cookies to collect certain information to help improve the functionality and performance of the site. If you choose to continue browsing this website, you agree to our use of cookies.

Accept