In January, the Federal Housing Finance Agency (FHFA) announced a combined $2.87 billion settlement with Bank of America involving mortgages sold by Countrywide Financial to Fannie Mae and Freddie Mac. According to several media sources that previewed the report by the FHFA Inspector General before its official release, a senior examiner within the FHFA warned in September 2010 that Freddie Mac ‘could be passively absorbing billions of dollars in losses’ due to its failure to adequately review defaulted loan documents during its settlement negotiations.
The new report criticizes Freddie Mac because it ‘did not review over 300,000 loans for possible repurchase claims’ as part of the settlement negotiations, which involved mortgages sold to Freddie Mac by Countrywide Financial, which was purchased in 2008 by Bank of America. The report also theorizes that Freddie Mac's handling of the settlement was predicated on its desire to maintain a strong business relationship with Bank of America.
A Freddie Mac spokesperson responded to the news of the upcoming report by saying the January settlement ‘was appropriate and reasonable.’