Mortgage Muddle
After months of haggling, U.S. state attorneys general and the country’s major mortgage lenders reached a record $25 billion settlement. Here are some of the key numbers in the deal:
$5 billion Dollar amount that each of the country’s five largest mortgage lenders—Ally/GMAC, Bank of America, Citi, JP Morgan Chase and Wells Fargo—will pay as part of the settlement
49 Number of states involved in the deal (Oklahoma reached its own settlement)
750,000 Number of borrowers who lost their homes to foreclosure between 2008 and 2011, and will receive financial compensation in the settlement
$700 billion Amount of negative equity held by U.S. homeowners (about 20 percent of mortgages are underwater), according to the New York Times
Government Growth
The Department of Justice (DOJ) asked Congress for additional funding to hire more staff in both its criminal and civil divisions in its recently submitted budget documents. Here’s how the budget requests broke down, as reported by the Wall Street Journal:
$5 million Amount of money that the DOJ requested for hiring in the criminal division
28 Positions that would be added in the criminal division with this money, including 16 prosecutors to assist with financial fraud cases
$7 million Amount of money requested by the DOJ’s civil division
51 Positions that would be added in the civil division, including 38 lawyers and nine investigators/auditors
$15 million Additional funding that the Federal Bureau of Investigation is requesting to better fight corporate crime, commodities fraud and mortgage fraud
Debt Disaster
It’s no surprise that a college education is expensive, but a new report from Reuters suggests that student loans incurred at law school can be especially catastrophic. With average student loan debt outstripping median starting salaries, more law school graduates are filing for bankruptcy.
$106,000 Average loan amount for a student at a private law school
$70,000 Average loan amount for a student attending public law school
$63,000 Median starting salary for law school graduates in 2010, according to the National Association for Law Placement
Discrimination Deluge
Littler Mendelson’s first Annual Report on EEOC Developments showed that a record number of discrimination charges were filed by the Equal Employment Opportunity Commission (EEOC) during the 2011 fiscal year.
99,947 Number of discrimination charges filed by the EEOC in 2011
75,768 Number of charges filed in 2006 (representing a 31 percent increase between 2006 and 2011)
40% Percentage of systemic investigations (cases with more than 20 expected class members) determined to have reasonable cause in the 2011 fiscal year
50% Percentage of cases that were filed in seven states: Georgia, Michigan, California, Illinois, Texas, North Carolina and Indiana
Industry Inertia
As if there weren’t enough bad news about the economy, the 2012 Client Advisory released by the Citi Private Bank and the Hildebrandt Institute predicts that this will be another year of slow growth for law firms. The report’s findings suggest that firms must be flexible, turning to mergers and alternative fee arrangements to increase growth.
1% Increase in the demand for legal services between 2010 and 2011
-1% Decrease in the demand for legal services in the fourth-quarter of 2011 compared to the same period in 2010
67% Increase in the number of completed mergers involving U.S.-based firms from 2010 to 2011, signifying that firms are using mergers as a growth strategy in a weak economy
11.8% Percentage of 2011 firm revenues attributable to alternative fee arrangements (the report predicts that number will rise to 13.4 percent in 2012)
