Bank of America to Cease New Mortgage Sales to Fannie
According to a company filing, Bank of America said starting this month it will no longer sell new mortgages to Fannie Mae.
The exceptions will be certain refinances and modifications, the bank said.
The discontinuance of new mortgage loans by BofA is in response to an ongoing dispute over the expenses on defective mortgages and Fannie Mae’s position on repurchases, several media publications have reported.
The Charlotte, N.C.-based BofA said it will sell new mortgages to Freddie Mac and Ginnie Mae. In 2008, Fannie and Freddie were taken over by the government to avoid a financial collapse. The Federal Housing Finance Agency has asked banks for refunds on sour loans in an effort to trim the cost of the government bailout implemented to save Fannie and Freddie.
Jerry Dubrowski, a BofA spokesman, said the bank’s decision to end the sale of new mortgages to Fannie will not affect credit available to customers. Other sources of liquidity are in place to ensure that the bank can continue to lend and support the housing market recovery, he said.
Meanwhile, in response to the FHFA’s plans to continue the conservatorship of Fannie and Freddie, NAFCU said there are more questions than answers on what happens next.
“Whether a government guarantee will be part of the future of any reform plan is a key issue for our members, and one FHFA has not answered. NAFCU strongly supports a viable secondary market to which credit unions have equitable access,” the trade group said.