BofA seeks to pin losses on title insurer
During the subprime loan era, it's well documented that lenders took all kinds of shortcuts -- such as failing to verify borrowers' employment or income -- to sell mortgages. Now Bank of America Corp., the nation's biggest mortgage lender, is saying the nation's second-largest title insurer did much the same thing and should be on the hook for more than $500 million in losses. In a lawsuit filed earlier this month, BofA alleged that First American Corp. in Santa Ana relied on home buyers to tell them about liens on their properties and other matters, rather than conducting traditional title searches. The shortcut was part of a program called QuickClose that BofA said in its suit did not require "title searches in connection with loans processed under the program." The bank said in the suit that the insurer has not made good on more than 5,000 mortgages it was supposed to protect. First American spokeswoman Carrie Gaska issued a statement Thursday saying the insurer regrets that its "valuable customer" has filed suit. "However, we are hopeful that we will be able to resolve this matter outside of court with continued discussions."