The Federal Housing Finance Agency (FHFA) has approved an agreement between Fannie Mae and Bank of America to resolve certain claims related to mortgages sold to Fannie Mae between 2000 and 2008, including the repurchase of approximately 30,000 loans by Bank of America.
In a press statement issued by the FHFA, the regulator says that it also approved the transfer of servicing for roughly 1 million loans from Bank of America to specialty servicers. The FHFA says that the transfer of mortgage servicing to specialty servicers is structured to ‘benefit borrowers and reduce future credit losses to Fannie Mae.’
‘Resolving these issues at this time is in the best interest of taxpayers and reduces uncertainty in the nation's mortgage finance market,’ says Edward DeMarco, FHFA Acting Director. ‘This is a major step forward in resolving issues from the past and providing greater certainty in the marketplace, which remain critical FHFA goals as conservator. I am pleased with the resolution achieved and thank everyone involved for their efforts.’
According to Fannie Mae, the agreement covers current and future repurchase obligations related to loans with an outstanding unpaid principal balance of $297 billion as of Nov. 30, 2012, that were originated between Jan. 1, 2000, and Dec. 31, 2008. As part of the agreement, Bank of America will make a cash payment to Fannie Mae of $3.55 billion and repurchase approximately 30,000 loans for an additional approximately $6.75 billion.
The agreement also includes Fannie Mae's approval of Bank of America's request to transfer the servicing rights of approximately 941,000 loans from Bank of America to specialty servicers.