Liability insurance for law firms who find themselves in the cross hairs of the foreclosure scandal
There is often a trickle down effect when it comes to massive economic dislocation. The latest evidence for that statement is to be found in Florida as a major law firm there was virtually shut down from its formerly lucrative business of processing foreclosures according to reports in the Wall Street Journal. The accusations include the now familiar litany of charges against banks servicing home loans including the forging of signatures and undue pressure to process loan repayments in haste.
So, the economic dislocation caused by the failure of the market for mortgage-backed securities in the last few years first led to problems in investment banks, then commercial banks and now to those businesses that support such businesses.
Liability Insurance for law firms has been “soft” for the past few years but as with banks, insurance costs may rise if there is a great increase in litigation arising out of the mortgage crisis.