Subprime Lending

The much reported “Subprime Crisis” is like the uninvited guests who have overstayed their welcome. Every day brings new reports of its severity, breadth and complexity. The present turmoil in the credit markets has its genesis in the unusual volume of subprime loans put on the books across the nation over the last five to ten years. The impacts are being felt in many aspects of our national, state and local economies. If you are a borrower, lender, mortgage broker, servicer, secondary market purchaser, trustee of mortgage backed securities, issuer of mortgage backed securities, issuer of D&O policies, bond or mono-line insurer (such as title insurers), then you already know you are in the center of this financial storm. These same storm clouds also threaten many others, including businesses serving homeowners and real estate developers, and corporations and their boards who have witnessed declines in their market values. In short, much of America’s business has a stake in the “Subprime Crisis.”

Fortunately, Frost Brown Todd has the people, the experience and the resources to guide its clients through this enlarging crisis. FBT has formed a multi-disciplined and inter-office practice group to help its clients assess their risks, formulate their strategies, and minimize any liability exposure. The members of the group include attorneys practicing in real estate, banking, securities, insurance regulation and litigation.

The subprime problems that have arisen to date begin with the various contractual relationships created in real estate transactions. FBT’s Subprime Lending and Practice Group includes members experienced with the details of real estate transactions and related loan documentation, loan sales, and experience with handling litigation involving these issues, including working with banks, insurance company lenders, title insurers, and closing agents. In the phase of the industry that includes the securitization of loans and the sale of mortgage backed securities, FBT has banking, corporate and securities attorneys familiar with the securitization of loans and the purchase agreements (including re-purchase and indemnity provisions) and pooling and service agreements used to facilitate the transfer of the debt and the servicing of the loans after transfer.

FBT also has attorneys in the group with insurance regulatory experience who can assess claims and formulate strategies to address the unique issues growing out of the regulation of mono-line carriers involved in the subprime lending process. Finally, the practice group includes attorneys with the requisite litigation skills to evaluate the risks and exposure created when claims are presented through a court filing or regulatory review. FBT’s litigation section has long been recognized as a leader in the area of complex, multi-party and class action litigation.

With offices in five state covering Ohio, Kentucky, Tennessee, Indiana and West Virginia, FBT is centered in an area of the country where the subprime loan problem is a primary social and political issue. FBT has the capability to service clients from all stages of the real estate, lending, securitization, investment and insurance industries that have exposure to risks and claims arising from this economic reality.

Service Area Contact(s)

  • David C. Olson

    513.651.6905
  • Greg E. Mitchell

    859.244.7548