MIAMI – The nation's second-largest bank is squaring off in a contentious court battle against a Miami real estate attorney who is accusing it of purging 1.88 billion records to conceal alleged fraud.
Bank of America, in a court filing, insists the records were copied, returned to the bank and still exist in its system.
But Bruce Jacobs, a former Miami-Dade County prosecutor, says the bank got rid of loan records he was seeking that he says may be evidence of fraud because the original records may have been altered by the bank.
"Bank of America thinks they're untouchable," Jacobs told CNBC. "They think they have so many zeroes in their bank accounts that they're above the law."
The bank, while declining repeated requests for comment, called Jacobs' allegations in a court filing last month "simply a collection of grievances against the banking and mortgage industries generally."
It said Jacobs' "baseless charges of fraud, conspiracy, perjury and other allegedly illegal or improper acts" by Bank of America have never been proven. Jacobs "nevertheless continues, without a trace of shame or irony, to recycle these reckless and rejected accusations ad nauseum."
Mortgage loan servicing and foreclosure abuses were at the heart of the landmark $25 billion agreement in 2012 between the nation's five largest mortgage servicing companies, including Bank of America, and the Justice Department and 49 state attorneys general to compensate homeowners who were hit by the housing crisis.
The settlement focused on what the Justice Department called "mortgage loan servicing and foreclosure abuses" as a result of the housing bubble. Many of those abuses involved what is known as robosignings. The loans are supposed to be endorsed with correct signatures when they are processed, and not at a later date, which the Department of Justice says happened in thousands of cases.
The Miami case began in 2013 as a foreclosure lawsuit in Miami-Dade Circuit Court against a couple who own a condo in Bal Harbour, Florida. After a financial setback, the couple sought a loan modification from Bank of America, which serviced the loan, held by Bank of New York Mellon. Bank of New York Mellon sued for foreclosure. Originally, Bank of America was not a party to the lawsuit.
The foreclosure case was settled last year, and the couple, who had to file for bankruptcy, remained in their home.
However, Jacobs, who represents them, filed a countersuit against Bank of New York Mellon in which he made serious allegations against the two banks.
What Jacobs said he discovered over several years — according to court documents filed in his numerous foreclosure cases in South Florida and reiterated in an interview — are allegations that Bank of America deliberately acted improperly.