Bank of America's lawsuit against the Federal Deposit Insurance Corp over $1.7bn in investor losses was dismissed by a federal judge.
Bank of America’s claims, based on its role as trustee for Ocala Funding 'have no value and must therefore be dismissed because no case or controversy exists,' Rothstein wrote in her decision yesterday.
The case stems from a mortgage-fraud scheme at failed lender Taylor, Bean & Whitaker Mortgage Corp. From 2002 through August 2009, Lee Farkas, while he was chairman of Taylor Bean, sold more than $1.5bn in fake mortgage loans to Colonial Bank with the collusion of its employees and diverted more than $1.5bn from Ocala Funding, a financing vehicle Taylor Bean controlled.
The judge also found that the court didn’t have jurisdiction 'because the Colonial receivership will never have the assets necessary to satisfy a judgment' in favor of Charlotte, North Carolina-based Bank of America.
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