A pair of Wall Street banks suing Bank of America Corp. over their soured investments in a mortgage vehicle created by Taylor Bean & Whitaker are seeking to look into the business relationship between Freddie Mac and the failed mortgage lender.

BNP Paribas SA and Deutsche Bank AG want to join in on a proposed probe of Freddie Mac, initially requested last week by Bank of America.

All three institutions said that they have watched Taylor Bean delay its own investigation for months, despite being authorized by a court to subpoena Freddie Mac officials and dig deeper into their business dealings with the Ocala, Fla., mortgage lender.

Without "a single document" produced as part of that court-approved probe, Bank of America is seeking to take matters into its own hands — and BNP Paribas and Deutsche Bank want to make sure they have access to whatever the Charlotte banking company digs up.

They are asking for permission to "participate" in the examinations and want the court to ensure they have access to the documents Bank of America unearths, according to papers filed with U.S. Bankruptcy Court in Jacksonville, Fla.

Judge Jerry Funk is to consider the request at a hearing Friday.

BNP Paribas and Deutsche Bank are both creditors of Taylor Bean and investors in Ocala Funding LLC, a mortgage conduit created by Taylor Bean, then the nation's 12th-largest mortgage originator.

Ocala borrowed money for short periods to fund Taylor Bean's home loans before they were sold to Freddie Mac. The entity has come under scrutiny from Bank of America, which was the trustee for notes issued by Ocala.

The bank says it believes Taylor Bean may have improperly diverted Ocala loans to Freddie Mac to cover the mortgage lender's servicing advances, and it claims that those Ocala loans are its property.

But Bank of America is not the only one making allegations regarding Ocala. Deutsche Bank and BNP Paribas have also sued B of A in federal court in New York, claiming it failed to protect more than $1.7 billion in cash and mortgages it was obliged, as trustee, to secure on their behalf.

Bank of America has disputed the allegations.

Taylor Bean shut down its lending operations last August amid allegations of massive fraud and the revocation of its right to make FHA-insured loans.

The company stumbled into bankruptcy protection a few weeks later and has since been managed by the restructuring firm Navigant Capital Advisors.

Bank of America suffered a related legal setback last week when a federal appeals court in Atlanta ruled that it cannot block the Federal Deposit Insurance Corp. from disposing of assets of Colonial BancGroup Inc., which failed last summer. B of A had asserted a legal claim on $1 billion in cash and loans. Colonial failed shortly after a plan to sell itself to Taylor Bean fell apart.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.