On 23 May 2007, NERA presented the third in our series of seminars for senior corporate counsel and seasoned general business litigators on complex commercial disputes, where we will be discussing the economics of subprime lending.

With mounting delinquencies and defaults, the subprime mortgage market is rapidly contracting. What was the business of companies like New Century Financial and why are failure rates so alarmingly high? Who are the key players in this market and how might they be affected? What were the economic incentives among the various parties involved and how were these being exploited?

Presenters Dr. Andrew Carron, President of NERA, and Dr. Chudozie Okongwu, former Senior Vice President, discussed the origins and evolution of the subprime market and provide a basic primer for the general business litigator on the economics of subprime lending -- the mortgage origination process, warehouse lending, securitization, and distribution. They discussed how this market works, the current crisis in this and potentially other credit sectors, and the likely ripple effect of commercial litigation.