Bank of America Sues its Insurers
A San Jose bankruptcy attorney comments on the latest with Bank of America
San Jose residents may be interested to know that Bank of America is seeking more than $535 million for losses it suffered once the housing market burst. This development seems somewhat ironic after BofA acquired the poster boy of the subprime lending fiasco, Countrywide Financial, 2 years ago. Still, BofA claims that title insurers are unfairly refusing to cover busted mortgage loans that originated before the financial meltdown. This despite receiving $45 billion in TARP funds from the federal government.
In response to the lawsuit BofA’s insurers claim that BofA and the firms it acquired prior to the global economic crisis are responsible for their own problems. Consequently, as of February BofA’s insurers have denied at least 2,200 of Bank of America’s claims, or $235 million in losses, and have yet to respond to another 2,300 claims.
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