At the same time, if the analysis which is the basis of the complaint is proven to be true, what then? The suit alleges a two-basis-point differential during the Class Period (and more during a sub-period). However, our analysis found both higher and lower readings on average throughout.

Even if we consistently found a two-basis-point increase on the first of the month, which we didn't, it wouldn't make much of a fiscal difference. Why?

A two-basis-point differential in the interest rate (from 5.00 percent to 5.02 percent) on a $100,000 loan with a 30-year term would amount to $1.22 more per month in a given six-month period.

According to the complaint, the “plaintiffs aver that the class exceeds more than 10,000 borrowers nationwide," and that's fine, but what might the actual damages to an individual borrower amount to, if they even exist? This is the question which needs to be answered.

Our final thoughts on the lawsuit

Regardless of the answer to that question, legal teams across the globe will be assembled to defend against these allegations, courts will be tied up, a lot of time and money will be spent putting together documentation and gathering evidence for both sides, and the costs of all of this will be passed on to new borrowers, regardless of the outcome. These costs become built into the price of mortgages, either in the form of higher rates or higher fees, and it is the next borrower who gets to pay for all this.

It's a long way around, but based upon our analysis of the data, we cannot determine a reliable pattern showing an upward spike in LIBOR available on the first business day of the month.

While we've nothing against injured parties seeking legal redress, it seems excessive to us to file an expensive class-action lawsuit to compensate “victims” whose total losses-if they exist and can be proven-might run into the tens or perhaps hundreds of dollars over a 10-year period.

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