Fannie Mae was able to
That's the conclusion of a report set to be issued Thursday by the inspector general of the Federal Housing Finance Agency, Fannie Mae's conservator.
Fannie used its leverage in approving mortgage-servicing transfers to resolve a bitter dispute with B of A. The dispute reached its nadir last year when
Fannie claimed many of the soured mortgages it bought from 2000 to 2008 from B of A and Countrywide Financial (which B of A later acquired) were defective at the time they were sold. B of A had countered that another settlement — which the report did not name — superseded Fannie's claims and exempted the bank from further repurchases.
The stalemate was broken after more than a year of meetings — and substantial differences in opinions about the values of the loans in question — when the two sides eventually agreed that B of A would pay $3.6 billion for loan losses, repurchase roughly 30,000 loans for $6.7 billion and pay $1.3 billion in compensatory fees for not foreclosing on borrowers in a timely manner.
"Nonetheless, Fannie Mae was able to bring Bank of America to the negotiating table due to the bank's interest in completing a significant sale of [mortgage-servicing rights] to third-party servicers," the report says. "Specifically, Fannie Mae would not consent to Bank of America's proposed transfer of the mortgage-servicing rights until B of A agreed to a resolution of Fannie's claims for compensatory fees."
In January, B of A announced