Archive for the “Mortgage Backed Securities” Category

The historic bankruptcy filing of Lehman Brothers is likely to have repercussions for months, even years to come. And no one knows this better than investors who own Lehman Brothers bonds. In just the short time since the nation’s fourth-largest investment firm filed for bankruptcy protection, the value of its bonds has plummeted, with some analysts predicting bondholders may be facing losses of $110 billion when all is said and done.

Lehman’s bankruptcy filing means its assets will be sold, with the proceeds distributed to lenders and bondholders. Anything left over then goes to preferred shareholders, followed by common stock shareholders.

Things are not looking good for Lehman bondholders, however. As reported Sept. 22 in the Financial Times, Lehman bonds were prevalent among pension funds and mutual funds. That means any losses will have a significant impact on untold numbers of ordinary individuals.

Making matters even worse for bond investors is the potential of additional losses on Lehman’s derivatives positions, which are still being unwound.

Typically, when a company declares bankruptcy, senior debt holders usually are first in line to collect their claims. Prior to its bankruptcy filing, Lehman had $110 billion of unsecured senior bonds that were valued at approximately 95 cents on the dollar. Now they are trading at about 20 cents to the dollar.

Subordinated notes, which are among the last to paid and of which Lehman holds more than $17 billion worth - were trading for as little as 3.5 cents on the dollar.

Lehman Brothers was forced into bankruptcy on Sept. 15, following massive losses on mortgage-backed securities and insufficient capital reserves. In total, the company lost 94% of its market value in 2008. At the time of its bankruptcy, Lehman listed $631 billion of debt, including $110.69 billion in unsecured debt and $17.6 billion in unsecured, subordinated obligations.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

The Great Wall Street Swindle: The Canada ConnectionWith Canada’s national election set for Oct. 14, the cross-border implications of the U.S. subprime debacle are taking stage, as financial institutions there post record losses this year related to subprime mortgage debt in the United States. Now, with those losses totaling in the billions of dollars - and potentially could become even higher - Canadian investors are crying foul, claiming they were blatantly lied to by Canadian banks and brokers about investments exposed to U.S. subprime loans.

Before the 1980s, commercial banks were required to have reserves of funds on hand in order to make a mortgage. When those regulatory requirements were lifted, the banks then “sold” the mortgage to a Wall Street investment bank, which turned around and sold stock in that mortgage to investors - i.e. a mortgage-backed securities. Soon, trillions of dollars had been poured into these securities. Over time, as Wall Street’s appetite for mortgage-backed securities grew, they needed more people to buy homes.

Enter subprime mortgages. Enticed by lenders’ NINJ loans - no income, no job - potential home buyers eagerly jumped on board. Only later, when the interest rates on those loans skyrocketed after a couple of years did homeowners realize they were in over their head. As a result, 3 to 4 million people will lose their homes because of subprime loans.

Now, what happens to this toxic debt - the pools of funds filled with these mortgage- backed securities?

On Sept. 14, Canada’s CBC Sunday news show provided the answer in an in-depth documentary titled The Great Wall Street Swindle. Among other things, the piece drew obvious parallels between the greed, corruption and mismanagement of many investment banks in the United States and the trickery and deception displayed by a number of Canadian banks and brokerages that sold nearly $35 billion worth of something called asset-backed commercial paper, or ABCP, to unsuspecting Canadian investors.

Steven Caruso, partner in the New York City office of Maddox Hargett & Caruso, P.C., compares the circumstances leading to the meltdown of Canada’s investment community to much like what occurred in the case of former Bears Stearns executives Ralph Cioffi and Matthew Tannin. The two men were the masterminds behind the creation and eventual collapse of two hedge funds loaded with toxic subprime mortgages. When the funds headed down the tube, Cioffi and Tannin simultaneously sang their virtues to investors.

“It was very similar to a pyramid scene,” said Caruso on CBC Sunday. “I don’t want to say they were cooking the books, it was more like grilling the books.”

In the case of Canada, banks apparently did some cooking of their own with asset-backed commercial paper. ABCP is an investment structure based on commercial mortgages that are bundled together and sold to banks. ABCP was supposed to be a safe, short-term investment, much like cash in the bank, according to Canadian banks and brokers. Better still, investors were told that ABCP was guaranteed by Canada’s big banks, an insurance policy of sorts.

Investors soon learned the reality of their brokers’ promises, however, when they began to hear about the burst of the U.S. housing bubble and later discovered their own investments in ABCP was connected to those American subprime mortgages.

By Aug. 27, the gig was up, and investors stopped buying ABCP altogether. As in what happened when the auction-rate securities market seized up in February 2008, Canada’s $34 billion ABCP market froze. Investors had no way of accessing their cash.

Much of the $34 billion in unredeemable ABCP is held by Canadian pension plans. Smaller amounts are held by companies and individuals.

As for the banks’ guarantee to honor investors’ ABCP investments? Most refused, reported the CBC show.

Iris Pierce, 65, is one of individuals who, on the advice of her Toronto brokerage firm, put her life savings in ABCP. Formerly retired, she is now forced to return to the workforce.

“I have no where to turn,” she says.

Meanwhile, Canadian banks, including the Bank of Nova Scotia, are being accused by retail and institutional investors alike of dumping their own inventory in asset-backed commercial paper while continuing to promote the investment to clients.

Sound familiar?

After months of wrangling, the Pan-Canadian Investors Committee - a group overseeing a controversial restructuring plan to rescue the $34 billion market of frozen asset-backed commercial paper - was given the go ahead to move forth with their proposal. Several Canadian activists groups had tried to block the plan because it will all but remove investors’ ability to sue those who were involved in selling them the debt securities, except in cases of fraud. And apparently there are many of those cases.

The plan itself will convert the insolvent 30- to 90-day ABCP debt into new notes maturing within nine years for some investors. That means those investors, who initially thought their investment was short term, will be able to retrieve their cash in nine years.

The bottom line: In the end, whether Wall Street or Canada, the corrupt actions taken by those in charge puts Main Street on the line to pay the ultimate price.

To view the CBC’s show, The Great Wall Street Swindle, in its entirety, target="_blank">Watch CBC Interview with Steven Caruso

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

Years of egregious actions on the part of Wall Street - from corporate arrogance, to incompetent accounting principles, to lax regulatory rules and oversight, to blatant criminality - are now taking their toll on the nation’s financial markets, and it’s Main Street paying the ultimate price. With the bankruptcy of Lehman Brothers Holdings, the fall of Fannie Mae and Freddie Mac, the IndyMac Bank failure, and now an $85 billion government bailout for insurance giant American International Group (AIG), investors and consumers alike are growing increasingly concerned about what lies ahead.

And they have good reason. The insanity happening on Wall Street means borrowing just went up in price. Financing a new car, paying for college, starting a business, building a hospital - all are likely to become more challenging in the months, even years, ahead.

Then there’s the psychological effect of Wall Street’s meltdown. As the financial crisis deepens and taxpayer-supported bailouts apparently becoming more commonplace, more investors - already distrustful of Wall Street and whose very existence they deem synonymous with greed and excess - will be prone to jump ship entirely, dumping their stocks, halting contributions to 401Ks and liquating mutual funds and other securities for safer investment vehicles.

Investors’ need to “do something,” anything, in the face of a crisis is warranted. At the same time, the ramifications of letting emotions guide decisions can often lead to even more uncertainty - in this case, for individual investors and the economy at large, say a number of financial experts.

“It’s like planning a road trip to California but then jumping in a car and heading east,” says one UBS broker, who requested anonymity. “Everyone is running to do something - which is understandable given the state of the markets and the 24/7 media coverage on the subject. Clearly, though, the ‘something’ that people need to do should be given much more forethought.”

Surprisingly, it’s not retirees who seem to be panicking, but rather younger 40-somethings, according to this UBS broker. “The older investors have been through this before,” she explains. “They remember the events of the past.”

Cases in point: On Oct. 19, 1987 - otherwise known as “Black Monday” - the Dow Jones Industrial Average was down 22.61% in a single day. On Oct. 26, 1987, it fell 8.04%; Oct. 13, 1989, 6.91%; Sept. 17, 2001, 7.13%.

By comparison, the Dow fell 4.4% on Sept. 16, 2008.

Still, when news that 158-year-old Lehman Brothers, one of the most established and respected investment firms on Wall Street, has filed for bankruptcy or that major money market funds - long considered to the safest of investments – are breaking the buck and falling below $1 a share, it’s almost impossible for investors not to feel powerless.

What’s Next?

Now the question on everyone’s mind is how do we get out of this mess? As reported Sept. 19 in a Wall Street Journal commentary by William Isaac, former chairman of the Federal Deposit Insurance Corporation, fixing the current financial crisis obviously will be a long-term process, but nonetheless contingent on a radical facelift for Wall Street.

Isaac contends that the financial problems gripping the country today are a direct result of something called Fair Value Accounting practices. Simply put, Fair Value Accounting means financial institutions that have financial instruments to sell - i.e. mortgage-backed securities - must mark those assets to market. “But what do we do when the already thin market for those assets freezes up and only a handful of transactions occur at extremely depressed prices,?” writes Isaac.

So far, says Isaac, the answer from the Securities and Exchange Commission (SEC) and the federal government has been to mark the assets to market even though no meaningful market exits.

Indeed, in his speech to the National Black MBA Association on Sept. 19, Bank of America CEO Kenneth Lewis strongly urged federal regulators to radically restructure the operating environment of Wall Street investment banks, instituting more of the oversight, capital requirements and business restrictions that are imposed on commercial banks today.

Short Selling

Another culprit behind the nation’s financial crisis: short selling, an act that until recently, the federal government has been exceedingly lax in regulating.

Short sellers make money when a company’s shares go down in price. They “borrow” shares from brokers and then resell them. When the share price on the stock becomes lower, short sellers give back the shares at the lower price and keep the difference.

While legal, critics of short selling say the method is at least partially to blame for the downfall and financial troubles of several Wall Street mavericks and other banking heavyweights in recent months, including Bear Stearns, Lehman Brothers, Merrill Lynch, Washington Mutual and Morgan Stanley.

On Sept. 18, New York Attorney General Andrew Cuomo announced that his office would be launching an investigation into the practice of short selling and, specifically, into the activities of short sellers regarding shares of Lehman Brothers and American International Group (AIG).

The SEC is cracking down on short sellers, as well. On Friday, Sept. 19, the regulatory agency issued a temporary ban on short selling in shares of 799 financial institutions. The ban will be in effect until Oct. 2, and could be extended pending market conditions.

Meanwhile, also on Friday morning, Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke unveiled a series of billion-dollar rescue plans aimed at salvaging the nation’s financial markets. Among the initiatives: creating a temporary asset relief program that would remove illiquid mortgage securities from the balance sheets of financial institutions and a federal guarantee on assets in money-market mutual funds whose values fall below $1 a share.

Officials are still working out details of the overall plan, and expect to meet with various members of Congress this weekend.

Keep in mind that Paulson’s plan - while no doubt a much-needed move in light of the current financial crisis - is a taxpayer-funded plan. Its cost doesn’t come cheap. The anticipated price tag: a whopping $1 trillion.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

It survived a stock market crash and the Great Depression, but Lehman Brothers could not triumph over the subprime mortgage problems of the 21st century.

Seconds before midnight on Sunday, Sept. 14, the 158-year-old investment banking firm agreed to file for Chapter 11 bankruptcy, officially ending a weekend of rumors and speculation on its demise. As employees began arriving for work on Monday morning, many were told not to return the following day.

Lehman Brothers was the nation’s fourth-largest investment bank, and the biggest underwriter of mortgage-backed securities. Its historic collapse is attributed to some $60 billion in toxic real estate holdings, along an inability to raise much-needed capital in recent weeks. In its filing for bankruptcy protection, Lehman reported total debts of $613 billion against total assets of $639 billion.

Lehman’s debt ratings were another key source of its problems. All three rating agencies had warned last week that rating downgrades were likely unless Lehman could come up with a solid restructuring plan or a buyer.

Many people are asking why the U.S. federal government, which intervened in the Bears Stearns case in March to orchestrate its sale to JP Morgan Chase and, more recently, prevented mortgage giants Fannie Mae and Freddie Mae from going under, failed to save Lehman Brothers. Reportedly, U.S. Treasury Secretary Henry Paulson was unwilling to use taxpayer money once again to resolve a Wall Street banking crisis.

For the time being, only Lehman’s parent company, Lehman Brothers Holdings, will seek Chapter 11 bankruptcy protection. The filing does not include any of Lehman’s subsidiaries or investment banking and asset management operations. Those units will continue to operate as usual for now. Analysts say Lehman is likely to either find a buyer - or buyers - for those business segments or unwind them gradually.

In addition, Wall Street’s major banks have created a $70 billion fund to ease the effects on the financial markets from the Lehman bankruptcy. Among the firms participating: Citigroup, Barclays, UBS, Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch and Morgan Stanley.

By 9:30 a.m. on Monday, Sept. 15, Lehman’s shares had fallen more than 90%, from $3.65 last Friday to just 29 cents. It was only six days ago that Lehman’s CEO Richard Fuld said the investment firm was poised for a comeback and that it had ample capital and liquidity.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

Lehman Brothers, one of the largest underwriters of mortgage-backed securities, reportedly is considering the creation of a “bad bank” model as it attempts to rid itself of some $30 billion in troubled mortgages and real estate holdings.

Fallout from the subprime crisis and ongoing credit crisis has taken a toll on Lehman Brothers. The company’s shares are down 77% this year, falling nearly 10% on Sept. 4 to $15.17. In addition, Lehman has been plagued by $8.2 billion of credit losses and write-downs in 2008, with analysts predicting the company’s upcoming earnings report could include another $4 billion of write-downs.

The New York-based firm also is expected to announce additional job cuts of up to 1,500 in mid-September, bringing the total number to 6,400 since June 2007.

Lehman’s ongoing streak of bad luck has caused Richard Fuld, chief executive officer, to weigh several options to rid the bank of hard-to-sell assets and raise much-needed capital. Splitting off Lehman’s undesirable assets is just one of the plans under consideration. In theory, the move would allow the bank to put $30 billion of essentially toxic, hard-to-value commercial real estate assets into a new publicly traded company.

Meanwhile, the “good” bank portion of Lehman would then put the troubled firm on more stable ground as it tries to regain the dwindling confidence of investors, as well as other banks, hedge funds and business partners.

Creating the separate “bad bank” would require Lehman to supply up to $8 billion in equity, according to a Sept. 5 article in The New York Times.

The bad bank/good bank model is not new. Several troubled financial institutions have used the strategy over the years, including Mellon Bank when it created Grant Street National Bank in 1988 to handle risky real estate loans. As part of the deal, Mellon shareholders were each given one share in the new company.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

It hasn’t been a good week for Wachovia Corporation. On Aug. 4, the bank saw its stock fall as much as 11 percent after analyst Morgan Keegan urged investors to sell their holdings. The following day, Wachovia and its affiliates were sued by a group of investors, who claim the companies caused them substantial financial losses because of ties the now-defunct Evergreen Ultra Short Opportunities Fund’s had to risky investments in subprime mortgage-backed securities.

In the lawsuit, which was filed in a federal court in Boston, investors charge that Wachovia, Evergreen Fixed Income Trust, Evergreen Distributor Inc., Dennis Ferro, chief executive of Evergreen Investments, and Kasey Phillips, principal financial officer of the trust, incorrectly valued and sold shares of the Evergreen Ultra Short Opportunities Fund at artificially inflated prices.

According to the complaint, “As shareholders redeemed their shares, the selling shareholders were overpaid, depleting the fund’s reserves and harming the plaintiffs.

“Plaintiffs purchased at an inflated price and were also damaged by the fund’s failure to properly redeem the shares of the fund investors at a price representing the correct net asset value.”

The complaint also charges that various statements found in the prospectus of Evergreen’s Ultra Short Opportunities Fund were false or misleading because the Fund failed to employ the safe investing strategy outlined. Instead, unbeknownst to investors, the Evergreen Ultra Short Opportunities Fund invested heavily in high-risk subprime mortgages, with more than 70% of its assets ultimately in these illiquid securities.

In 2008, the Evergreen Ultra Short Opportunities Fund was named one of the worst-performing ultra-short bond funds, losing more than 20 percent. By comparison, similar bond funds posted losses of about 2 percent.

In June, Evergreen Investments announced it was shutting down the Ultra Short Opportunities Fund. The Fund’s shareholders would be paid only $7.48 per share from the liquidation.

At the time of the liquidation, the total value of the Evergreen Ultra Short Opportunities Fund was $403 million. In December 2007, it had been valued at $947 million.

Evergreen Investments is the money-management unit of Wachovia Corp.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

A former Credit Suisse broker who is the target of a federal investigation into an auction-rate securities scam has been declared missing and likely left the United States for his home in Bulgaria.

Bulgarian-born Julian Tzolov and Eric Butler are two former Credit Suisse brokers accused of lying to investors about how they invested their money in auction-rate securities. The two men resigned from Credit Suisse on Sept. 7, 2007.

In other auction-rate securities news, UBS has agreed to pay Massachusetts $4.4 million as part of a settlement involving allegations by the state that it misrepresented the securities to municipalities.

Massachusetts securities regulators launched an investigation into UBS and its marketing practices of auction-rate securities in February, following complaints that the Swiss-based bank had deceived clients when it sold them the securities.

Of the $4.4 million settlement, $1 million will go toward state fees and to educate government officials about appropriate investments for their money.

The remaining funds will allow Massachusetts cities and agencies to redeem the full value of their securities from UBS, according to Massachusetts Attorney General Martha Coakley.

The $4.4 million settlement now brings the total amount that UBS has paid to Massachusetts over its mishandling of auction-rate securities to $41.3 million, following a $37 million partial settlement that the bank agreed to in May.

Meanwhile, Texas is now on the trail of UBS. The securities board in the Lone Star State is considering barring the bank from doing business in Texas, in which UBS’ wealth management unit has approximately $65 billion in assets under management.

Auction-rate securities are municipal bonds, corporate bonds, and preferred stocks in which interest rates or dividend yields reset through auctions held every seven, 14, 28, or 35 days. In February 2008, Wall Street investment banks and securities firms pulled out of the auction market, thereby setting off a chain reaction of auction failures.

As a result, thousands of investors have been left in limbo. Initially sold on auction-rate securities because of their supposed cash-like nature, they now find themselves holding illiquid investments.

Many investors have since taken their frustration out in court. According to a study by NERA Economic Consulting, a New York economic-consulting group, shareholder class-action filings have risen substantially in 2008, and expected to reach a 42% increase by year end - the largest annual rise since 2002.

Our affiliation of securities lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.Â

A late-breaking story from the Associated Press (AP) is reporting that the Federal Bureau of Investigation (FBI) is looking into the now-defunct IndyMac Bancorp for possible fraud.

According to the AP story, the investigation is focused on IndyMac’s activities regarding home loans it made to high-risk borrowers.

Concerns about IndyMac’s financial health led customers to withdraw $1.3 billion from the bank in the past 10 days. On July 12, assets of the California-based bank were seized by federal regulators. Its collapse is the second-largest bank failure in U.S. history.

Currently, the FBI is involved in 21 investigations related to the subprime mortgage crisis. The focus of the investigations concerns accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

Losses to homeowners and other borrowers who were victims in home-fraud schemes now total more than $1 billion.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses. Â

Shares of Fannie Mae and Freddie Mac fell to their lowest levels in more than 17 years on Friday, July 11, amid growing concerns that a government bailout plan was part of the mortgage giants’ future.

Fannie Mae and Freddie Mac control nearly half of the entire mortgage market in the United States. Speculation of a government takeover has sent the companies’ publicly traded shares in downward spiral this week. Fannie Mae’s stock fell to $10 at the end of the day on July 11; last year, at this time, it was trading at approximately $70.

Shares of Freddie Mac closed at $8.05, after falling to an earlier low of $3.89.

Earlier in the day, Treasury Secretary Henry Paulson tried to play down fears that a government takeover was imminent, but his reassurances had little impact. If such action does happen, however, it would be unprecedented - and costly. Shareholders would likely be wiped out, with the losses on the home loans that Fannie Mae and Freddie Mac own or guarantee - half of all U.S. mortgages - paid by taxpayers.Â

In a news conference, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) also tried to calm fears regarding the financial state of the two mortgage companies, suggesting they could be given access to Federal Reserve’s emergency lending program. The program, which was created in March as part of the Fed’s role in facilitating the purchase of Bear Stearns by JP Morgan Chase, provides direct loans to investment banks at a discount.

Who Are Fannie Mae and Freddie Mac?

Fannie Mae, short for Federal National Mortgage Association, and Freddie Mac, short for Federal Home Loan Mortgage Corporation, are shareholder-owned companies mandated by Congress to provide funding to the U.S. housing market.

Fannie Mae was founded in 1938. Until 1968, it was a government sponsored agency. Freddie Mac was established in 1970. Fannie Mae and Freddie Mac do not lend directly to homebuyers; instead, they buy mortgages from approved lenders and then sell them to investors.

The financial health of Fannie Mae and Freddie Mac is critical because of the momentous role they play in the U.S. housing market. The companies hold or guarantee more than $5 trillion worth of mortgages - roughly half of the $9.5 trillion debt of the United States. If one or both of the companies were to fail, it could unleash untold damage on the country’s financial system and the broader economy.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

With the rate of foreclosures rapidly rising, the drop in home prices escalating, and the crisis extending to nearly every major city, the most critical real estate recession in decades remains far from over, says an April 29 USA Today article by Stephanie Armour. Investors beware.

Logging the biggest decline since its creation in 2001, the Standard & Poor’s/Case Shiller home composite index covering 20 cities dropped by 12.7 percent in February compared with last year. Every one of the 20 cities (except Charlotte) registered price declines; 17 suffered record drops for the year. According to David Blitzer, chair of S&P’s index committee, “There is no sign of a bottom in the numbers.”

Foreclosure activity rose a shocking 112 percent year-over-year and 23 percent quarter-to-quarter, according to CNBC.com. Foreclosure activity includes auction sale notices, bank repossessions, and default notices.

One significant concern is the unprecedented rise in bank-owned properties. “Typically you’ll see about 20 percent of the foreclosure filings being bank-owned,” said Rick Sharga of RealtyTrac in California. “We’re getting to a point now where it’s well over 1/3 and aiming at 40 percent, so that suggests that a lot of these homes can’t even be sold to investors at auctions—because there’s just no equity in the properties.”

More than a million bank-owned homes may flood the market by the end of the year, Sharga predicts. With approximately four million properties in the Multiple Listing Service (MLS), that means 25% will be owned by banks. Despite lenders’ assertions about offering work-outs or refinancing, as well as programs to assist borrowers in default, the rising number of homes now owned by banks points to significant problems with the effectiveness of these workouts and programs.

According to a RealtyTrac report, Nevada suffered the worst foreclosure rate at 3.6 times the national average, just ahead of California and Arizona. In the first quarter of this year, one in 54 Nevada homeowners received a foreclosure notice.

Through the coming months, analysts predict even more foreclosures, causing greater problems with prices. In order to clear their balance sheets of home inventory, banks continue to slash prices, compelling sellers who owe more than their homes are worth to further cut prices.

According to Mark Zandi, chief economist at Moody’s Economy.com, “There’s no sense of stabilization. The foreclosures are causing a vicious cycle, and the job market is weakening. This doesn’t feel therapeutic anymore. This is undermining the economy.” The results raise a multitude of red flags for investors, who may want to examine their options.

Only when foreclosure filings diminish can the real estate market recover, experts say. Therefore, the faster home prices hit bottom, the quicker buyers can resuscitate home sales, said Naroff Economic Advisors’ Joel Naroff. “We’re beginning to get massive price declines, and we need that to clear this market,” he concluded.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.Â