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on Subprime Market Woes Many journalists are turning to Professor David Reiss to answer difficult questions about the crisis in the subprime lending market that began in the summer of 2007.
Professor Reiss said that lawsuits will likely be filed against entities including the ratings agencies, lenders and investment banks. “You name a player,” he said, “and I think you will see a lawsuit coming from that direction.” He discussed sources of various protections and legal remedies that might be available to borrowers and investors, including consumer protection laws and suits for fraud, as well as securities laws. Following the announcement that a consortium of investors is suing the Bear Stearns hedge funds that collapsed this summer after investing in subprime securities, Professor Reiss also spoke to the Washington Post about the potential for more lawsuits. According to the Sept. 11, 2007 article in the Post, “The high-profile busts at Enron and WorldCom resulted in ‘a handful of focused litigation against a handful of very particular parties,’ said David Reiss, an associate professor at Brooklyn Law School. ‘The difference now is you have an immense amount of litigation against an incredible range of parties. . . . Everybody can point fingers at so many other people that you just don’t know when it’ll stop.’” In a recent article, “Subprime Standardization: How Rating Agencies Allow Predatory Lending to Flourish in the Secondary Mortgage Market,” which was published in the Florida State University Law Review (2006), Professor Reiss presciently warned that the subprime market was suffering from predatory mortgage lending and the unregulated activities of the securities rating agencies. The article, which won an award as the best article of 2006 on a topic dealing with consumer financial services law according to the American College of Consumer Financial Services Lawyers, was excerpted in the Fall 2006 issue of BLS LawNotes. Professor Reiss teaches real estate and property law as well as clinics on community and commercial development at Brooklyn Law School. Focusing on the not-for-profit, government and community sectors, he has also taught at the Seton Hall Law School Center for Social Justice and practiced as an associate at Paul, Weiss, Rifkind, Wharton & Garrison in New York, and at Morrison & Foerster in San Francisco.
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