The big-four banks are spending billions when it comes to showing up in court, as shown by the massive litigation expenses each reported during the first quarter. The strategies, however, differ from bank to bank. When the financial crisis struck in 2008, a wave of lawsuits seemed a foregone conclusion. For the mortgage side of these institutions, these cases involve alleged securities infringements, overcharges involved in the origination process and reams of foreclosure challenges. Bank of America (BAC) reported $940 million in litigation costs during the first quarter, which increased from $588 million one year ago but dipped from $1.5 billion in the previous period. “Costs associated with mortgage-related assessments and waivers were $874 million, including $548 million for compensatory fees resulting from foreclosure delays compared to $230 million in the fourth quarter of 2010, with the remainder being out-of-pocket costs that we do not expect to recover,” the bank said in a regulatory filing. JPMorgan Chase (JPM) reported $1.1 billion in litigation expense during the first quarter, actually down from $2.9 billion one year ago. “There is no assurance that the firm’s litigation reserves will not need to be adjusted in the future,” JPMorgan said in its filing. The other two mega-banks reported their litigation expenses less directly. Citigroup (C) establishes accruals for litigation and regulatory matters when it believes a loss has been incurred and that the loss can be easily estimated, according to its filing. “At March 31, 2011, Citigroup’s estimate was materially unchanged from its estimate of approximately $4 billion at Dec. 31, 2010,” Citi said. Wells Fargo (WFC) said in its presentation to investors operating expenses jumped to $472 million in the first quarter from $193 million one year ago. Higher “first quarter litigation accruals for foreclosure-related matters” pushed the increase, the bank said. The bank said in a regulatory filing Friday that potential litigation losses could exceed the bank’s previous estimates by $1.7 billion as of the end of the first quarter. Thad Bartholow, a foreclosure defense attorney and partner for the Dallas-based firm Armstrong Kellett Bartholow, said each bank has a different strategy in handling foreclosure cases, particularly on how far to take it before expenses become too much. “It varies by the company. I found that some banks are eager to keep fighting cases, while some far more willing to cut their losses. It’s not consistent,” Bartholow said. The major issue large banks are attempting to handle at the moment are issues with their in-house mortgage servicing departments. Each of the big-four signed consent orders with federal regulators in April after an investigation into how these employees were mishandling foreclosure cases. The banks will likely face millions in compliance costs and potentially billions in penalties from the scandal going forward. “I think the problems they’re facing in terms of mortgage servicing are pushing costs up, and it’s pretty amazing how uniform these problems are,” Bartholow said. Write to Jon Prior. Follow him on Twitter @JonAPrior.