Bank of America Corp. will hand over $26.4 million in mortgage loans to the bankruptcy liquidation trustee for defunct Taylor, Bean & Whitaker Mortgage Corp., the Daily Business Review reported on Friday. Ocala, Fla.-based Taylor Bean and ex-CEO Lee Farkas perpetrated a $2.9 billion fraud, causing the collapse of Montgomery, Ala.-based Colonial Bank in the process. Taylor Bean was the nation's largest private mortgage origination company when it filed for bankruptcy protection in 2009 after being cited for manufacturing fake loans and failing to service 528,000 others. Farkas is serving a 30-year prison sentence. A settlement plan was approved by U.S. Bankruptcy Judge Jerry A. Funk in Orlando in 2011, and liquidating trustee Neil F. Luria has been pursuing clawback lawsuits to reimburse creditors, including Freddie Mac and Ginnie Mac. The settlement with Bank of America calls for the trust to pay $10.3 million and receive the $26 million mortgage pool. The lawsuit against the bank claimed it failed to pay Taylor Bean $40 million under forward-purchasing agreements pending at the time of the bankruptcy filing.
