The government is pursuing negligence claims against law firms that advised Bradford &  Bingley on hundreds of buy-to-let loans that are facing losses.

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B&B, nationalised in 2008, is alleging that anti-fraud guidelines were ignored by firms  that advised on “same-day remortgaging”, a practice that was promoted by buy-to-let  investment clubs at the height of the property boom.

Investors were encouraged by real estate entrepreneurs to buy property from distressed  sellers or developers that were being offered at below market value using a one-day  bridging loan.

Investors then remortgaged on the same day at the open market value of the property,  allowing them to bank a quick profit.

B&B alleges that some solicitors failed to disclose crucial information about the deals to  Mortgage Express, the arm of B&B that was the largest buy-to-let lender during the 2006  boom.

The bank said an internal review highlighted a number of same-day remortgage applications  that had been “unknowingly accepted” when they otherwise?might have been rejected.

Potential losses to B&B would include the costs of repossession if borrowers default and  the shortfall on its mortgage advance, as in most cases the value of the loan far outweighs  that of the property.

The UK bank said it was pursuing claims against solicitors where there had been a breach of  the Council of Mortgage Lenders Handbook. It claims solicitors have a duty to supply  specific information when lodging mortgage applications.

A solicitor that failed to report that borrowers had acquired their properties less than  six months before remortgaging, for example, would be in breach of the lending code.

B&B said the information required under its own lending policy was “separate and distinct”  from the information a solicitor was obliged to provide under the CML Handbook rules.

“There will be many more claims of this type in the future as buy-to-let lenders struggle  to find someone to blame for what looks like a lack of due diligence,” said David Lawrenson  of LettingFocus.com, a private rented sector consultant.