Thursday, February 23, 2012

Bank of America no longer selling many mortgages to Fannie Mae

After a dispute over repurchase claims, Bank of America is no longer selling many of its mortgages to Fannie Mae, the bank disclosed Thursday in its year-end report.

As of this month, the bank will only sell Making Home Affordable Program refinance mortgages to Fannie Mae to be made into mortgage-backed securities, the bank said. No other mortgages will be sold to Fannie Mae.

The mortgage giant makes banks repurchase loans it determines were sold using incorrect data, known as rep and warranty claims. In its last quarterly report, the Charlotte bank disclosed that it did not agree with some of the determinations Fannie Mae had made.

Fannie Mae and Freddie Mac own about half of the nation's mortgages. Their purchases add liquidity to the mortgage market and allow banks to make more loans.

Bank of America spokesman Dan Frahm said the bank does not expect the decision to have a material impact on the business, and said the bank will use other sources of liquidity to continue to make loans.