Last week, the Supreme Court heard oral arguments on two cases that could have significant ramifications for how second liens are handled when a borrower has negative equity. Both of the cases involve Bank of America arguing on behalf of second-lien lenders and holders. “The Supreme Court’s resolution of the BofA v. Caulkett and BofA v. Toledo-Cardona will either ratify the trend of other circuits, which would benefit junior lenders, or overturn it, which would favor homeowners and first-lien mortgagees,” according to lawyers at ...