Bradford & Bingley is suing a number of law firms over same-day mortgage deals involving the provision of bridging loans.
The building society is pursuing the claims against law firms that, it claims, failed to disclose crucial information about the deals to its Mortgage Express arm.
This division provided bridging loans to acquire the properties from a distressed owner, which were then immediately remortgaged at the open-market value, which should make the remortgager a considerable profit.
However, in many of these cases, the legal firms involved allegedly breached anti-fraud legislation by not telling them about the remortgage deals, and hundreds of the loans now face losses as a result.
Bradford & Bingley is claiming that solicitors have a legal duty to supply all the information when making a mortgage application. It adds that the solicitors it is pursuing have all breached the guidelines laid out in the Council of Mortgage Lenders Handbook.
One industry insider, property writer David Lawrenson, told Mortgage Strategy that many of the mortgage brokers involved do not believe B&B was unaware of the same-day remortgaging deals going on. 