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Mathematical methods given the green light by judge

There are currently 15 cases involving banks, including Credit Suisse and Bank of America that deal with mortgages. These cases have been consolidated as the Federal Housing Finance Agency (FHFA) is the plaintiff and the banks are the defendants. The FHFA oversees US government giants Fannie Mae and Freddie Mac. In this lawsuit, which began last year, the FHFA is fighting the banks as they backed 1.1 million mortgages and lost $200 billion on them. Fannie Mae and Freddie Mac had guaranteed the mortgages that the banks underwrote them now face losses.

The problem in this particular case is the number of mortgages involved. According to Thomson Reuters News and Insight, it can cost up to $400 and take up to three hours to re-underwrite each mortgage. As a result, the FHFA would like to use methods of statistical sampling to analyze the massive number of mortgages quickly and cost-effectively. However, the banks challenged the “reliability” of this method.

A U.S. District Judge denied the request, meaning that the plaintiff, the FHFA can use this method in bringing the banks to court. The agency will now begin to use its mathematical methods to determine which mortgages are losses were at the fault of the banks for a January 2014 trial.

If you have been affected by the mortgage crisis or if you are considering filing bankruptcy, call the law office of Jayson Lutzky, P.C. Mr. Lutzky has been practicing law for over 29 years and has helped thousands of satisfied clients over that period. Initial in person consultations are free, so call (800) 660-5299 today or visit www.BankruptcyNYC.com for more information.

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