Bank of America issued just $7.9 billion of Ginnie Mae securities in the fourth quarter, a 71% plunge from the same period in 2010, according to new figures compiled by ASR's sister publication, National Mortgage News and the Quarterly Data Report.

Compared to the third quarter, the bank's GNMA business fell by almost half.

The results are hardly surprising, but when the bank recently disclosed that it would stop selling purchase money mortgages to Fannie Mae it indicated that more of its production might wind up in GNMA securities.

GNMA MBS are culled from the Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, currently the product of choice for consumers looking to buy a home as opposed to a refinancing.

The bank, however, managed to grow its GNMA servicing business by 11% during the year.

Over the past two years, as part of a concerted effort to scale back its once massive residential business, BofA has shuttered its wholesale and correspondent divisions, greatly curtailed warehouse financing, halted cash out refinancings, and delayed refinancings for current servicing customers.

Recently it was disclosed that BofA agreed to pay the U.S. Department of Housing and Urban Development roughly $1 billion to resolve allegations that Countrywide Financial Corp. (CFC) violated FHA underwriting guidelines. BofA bought CFC in August 2008.

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