Bank of America sues itself 11 times in recent PBC foreclosure suits

Miami /
Apr.April 11, 2012 04:30 PM

In another symbol of the faulty paperwork America’s largest lenders used to file for foreclosures, Bank of America has sued itself 11 times in Palm Beach County foreclosure cases since late March, the Huffington Post reported.

The suits stem from Bank of America servicing mortgages on behalf of other investors, a practice undertaken by most big banks that led to the so-called robo-signing scandal. As the servicer, the bank processes payments, negotiates with borrowers and handles foreclosure proceedings without actually owning the loan.

At the same time these banks frequently lent second liens on properties because of the high interest rates they offered in place of protection against foreclosures.

“We are servicing the first mortgage on behalf of an investor and we own the second mortgage,” a Bank of America spokesperson said. “Naming the second-lien holder in the suit is necessary to eliminate the junior interest.”

But when the lien-holder is the bank, the requirement no longer holds. Law professors told the Huffington Post that the “mindless” practice of naming itself in foreclosure suits was remarkably similar to the robo-signing issues that resulted in the collective $26 billion foreclosure settlement. [HuffPo]


Related Articles

arrow_forward_ios
The Coconut Grove Playhouse and Miami Mayor Francis Suarez (Phillip Pessar/Flickr, Getty)
Miami-Dade County wins lawsuit over Coconut Grove Playhouse partial demolition
Miami-Dade County wins lawsuit over Coconut Grove Playhouse partial demolition
(iStock/Illustration by Kevin Rebong for The Real Deal)
Miami Beach agent wins $1M judgment in lawsuit over owed commissions and stolen funds
Miami Beach agent wins $1M judgment in lawsuit over owed commissions and stolen funds
Developer Louis Birdman (One Thousand Museum, Getty)
One Thousand Museum developers score $90M refi to stave off foreclosure
One Thousand Museum developers score $90M refi to stave off foreclosure
A rendering of the the property at 3601 North Miami Avenue and HES Group CEO Francisco Arocha (Photos via HES, Francisco Arocha)
Midtown Miami Triptych dev site owner files for Chapter 11 amid foreclosure
Midtown Miami Triptych dev site owner files for Chapter 11 amid foreclosure
HFZ's Ziel Feldman. (Getty, Shore Club)
HFZ faces lawsuit, unpaid tax bill for Shore Club South Beach hotel
HFZ faces lawsuit, unpaid tax bill for Shore Club South Beach hotel
Simon and David Reuben with One Thousand Museum (Getty, iStock)
Reuben Brothers seeks to foreclose on Zaha Hadid-designed One Thousand Museum
Reuben Brothers seeks to foreclose on Zaha Hadid-designed One Thousand Museum
Jared Galbut, Keith Menin and the Bentley South Beach (The Bentley Hotel)
Lawsuit against Jared Galbut, Keith Menin alleging fraudulent special assessments at Bentley South Beach moves forward
Lawsuit against Jared Galbut, Keith Menin alleging fraudulent special assessments at Bentley South Beach moves forward
Clockwise: 310-318 Northwest 25th Street, Chaim Cahane, Jonathon Yormak and Jon KrasnerĀ 
Wynwood developer sells retail property in foreclosure for $12M
Wynwood developer sells retail property in foreclosure for $12M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...