Subprime lending litigation and investigations: insuring against the costs


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PUBLISHED ON: May 2, 2007

A sudden but unsurprising wave of bankruptcy filings within the subprime lending industry is now spawning private litigation and government investigations. The targets of these actions are not only the insolvent lenders, but also the third-party financial institutions, including their directors and officers, that purchased the subprime loans, then “repackaged” the lenders’ portfolios. Whether your organization is the floundering subprime lender or the bank that assumed these "second chance" loans, an inevitable question becomes: Will your directors and officers (“D&O”) or professional liability (“E&O”) insurance policy "protect" you from these actions?