This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank of America Ensnared in Legal Web Over Ocala

NEW YORK ( TheStreet) -- Bank of America's (BAC - Get Report) twisted legal entanglements related to the fallout from Ocala Funding brings to light the reverberations and complexities created by such special-purpose vehicles.

Deutsche Bank (DB - Get Report) and BNP Paribas filed suit against Bank of America on Wednesday, alleging that the Charlotte, N.C.-based lender failed to make good on $1.7 billion worth of secured notes issued by Ocala. Deutsche Bank claims it is owed $1.2 billion, while BNP Paribas claims it is owed $480.7 million.

In another lawsuit tied to Ocala in August, Bank of America asked a judge to block Colonial BancGroup from selling over $1 billion worth of loans held by the vehicle.

Deutsche Bank and BNP Paribas claim that Bank of America owes them money because the bank acted as collateral agent, custodian, indenture trustee and depositary for the notes. Bank of America claimed that Colonial held the underlying loans as custodian, agent and bailee, but that even when bailee letters were terminated, Colonial refused to return proceeds to BofA.

All of the lawsuits stem from the failure of Taylor, Bean & Whitaker Mortgage Corp. in August, and have been exacerbated by Colonial's seizure by the Federal Deposit Insurance Corp. later that month. The FDIC became receiver for Colonial, making it in charge of collateral payments. It sold some of the bank's assets to BB&T (BBT - Get Report) later that month.

Ocala was created as a liquidity facility for Taylor, Bean & Whitaker. The vehicle relied on mortgage loans as collateral, pending their sale to Freddie Mac (FRE). However, Taylor, Bean & Whitaker was delisted as an approved seller of mortgages to Freddie Mac shortly before its bankruptcy.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.44 -0.17%
BBT $38.48 -0.03%
DB $25.38 0.24%
AAPL $118.03 -0.71%
FB $105.41 -0.31%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs