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BofA FDIC Suit for $1.7 Billion Investor Losses Revived

BofA FDIC Suit for $1.7 Billion Investor Losses Revived

Bank of America Corp.’s lawsuit against the Federal Deposit Insurance Corp. for $1.7 billion in client losses was revived after the agency said that a bank at the center of the Taylor Beanscandal may have enough assets to pay the claims.

U.S. District Judge Barbara Rothstein yesterday vacated her August 26 order dismissing Bank of America’s claim against the FDIC, which it made as trustee for Ocala Funding LLC, a mortgage financing vehicle Taylor Bean controlled.

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 $1.5 billion in fake mortgage loans to Colonial Bank with the collusion of its employees and diverted more than $1.5 billion from Ocala Funding.

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