The Chilling Effects of the Subprime Meltdown At A Glance

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Problems in the subprime lending market will affect a broad array of stakeholders in the lending arena -- including homeowners, loan originators, loan servicers, financial advisors, investors in asset-backed securities, and auditors, among others. Examples of possible disputes that will arise include allegations of predatory lending, misrepresentation and omissions related to the valuation of the loans and the profits from selling or servicing them, suitability of investments, breach of contract related to loan servicing, and fraudulent conveyance issues. Some lawsuits have already been filed along those lines against New Century Financial Corp. and NovaStar Financial Inc.

The issues will require a deep understanding of the economic foundations and roles of each stakeholder in the subprime lending market; an understanding of how that market performed over time; and a broad, objective analysis of the events that caused the meltdown.

NERA experts have substantial background in the subprime lending market and experience with litigation among the stakeholders in that market, including our work in the previous subprime market crash in 1998. Our experts combine knowledge of economics, finance, accounting, valuation, and industry experience to address issues in civil litigation, business decision-making, public policy, and regulation.