Bank of America is getting slapped with another lawsuit by Dallas County, that if successful could be a harbinger for many similar suits to come, Bloomberg News reported. Meanwhile, according to Reuters, the bank — the largest in America — is on the verge of selling off $880 million of U.S. real estate assets to a group of investors comprised of Square Mile Capital Management, Invesco and Canyon Capital Realty Advisors.
The lawsuit names BofA and MERS, an electronic system for processing mortgages that acts as the lender’s nominee and becomes the mortgagee, provided that the loan was originated by one of the financial institutions that owns MERS. Those include Citigroup, JPMorgan Chase, the Mortgage Bankers Association, American Land Title Association, Freddie Mac and Fannie Mae. It alleges that BofA and MERS facilitated swapping of mortgages without properly recording the deals with counties and paying the accompanying fees.
Dallas County sued for $100 million, and according to County Attorney General Craig Watkins, other counties across the country are interested in filing similar suits, which could ultimately cost the bank billions of dollars. But a spokesperson for MERS said the system is legal, and the suit is “without merit.”
BofA has come under heavy scrutiny in the last year. In August, AIG sued the bank for $10 billion, and New York State Attorney General Eric Schneiderman believes a separate $8.5 billion settlement it made over faulty mortgages is not punitive enough.
The bank’s $880 million portfolio sale includes current and delinquent loans on 32 properties, including warehouses, office properties and senior housing across 15 states. Bank of America has been selling off real estate assets all year to raise capital to offset home loan losses and the aforementioned lawsuits. [Bloomberg News and Reuters]