Bank of America Sues First American on ‘Lien Protection’ Claims

March 18 (Bloomberg) — Bank of America Corp. stepped up efforts to curtail the cost of soured mortgages by suing First American Corp., claiming the title insurer refused to cover more than 5,500 loans that caused $535 million of losses.

First American, the second-biggest title insurer, was supposed to protect the bank against defective titles on home- equity loans and lines of credit, according to the suit, filed March 5 in a North Carolina court. The suit focuses on loans in which Bank of America relied on a borrower’s word regarding any outstanding liens or mortgages, the suit said.

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