BofA Manager Demoted in Mortgage Case Sues Bank
LOS ANGELES (AP) _ A former Bank of America branch manager who was demoted and named in a $385 million lawsuit by the bank in 1985 has sued the bank for unspecified damages.
Beverly Hegg was one of six bank officers and three companies named in a suit filed last March by Bank of America in a mortgage-securities fraud case.
The bank, which acted as escrow agent for the securities backed by pools of mortgages, eventually took a $95 million loss in the case.
Ms. Hegg, who was manager of the bank’s suburban Inglewood branch, denied she bore any responsibility for the loss and contended that her demotion after 28 years of service was a breach of contract.
Ms. Hegg took over the Inglewood branch in April 1983.
She said in her lawsuit that she had never managed a branch with an escrow department, knew nothing of escrow procedures and relied on the previous manager’s assurances that the department was operating properly.
She said the previous manager had approved National Mortgage Equity Corp., which packaged the faulty mortgage-backed securities, as a customer before she took over.
In San Francisco, Bank of America spokesman Peter Magnani said officials hadn’t been served with a copy of Ms. Hegg’s suit and hence had no comment.
He also said the bank’s suit filed last year is still in pre-trial motions and no date has been set for it to go to trial.