Bank of America and Fannie Mae reached a $10.3 billion agreement Monday to resolve repurchase claims on loans originated from 2000 through 2008. The agreement also requires BofA to pay the GSE $1.3 billion in compensatory fee obligations.
BofA simultaneously announced its intent to sell the servicing rights of 2 million mortgage loans to specialty servicers. These loans are owned by Fannie Mae, Freddie Mac, Ginnie Mae, and private label securitizations.
BofA will repurchase 30,000 loans for $6.75 billion and submit a $3.6 billion cash payment to Fannie Mae.
“Together, these agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time,” said Brian Moynihan, CEO of BofA, with Monday’s announcement.
The agreement settles $11.2 billion in unresolved claims from Fannie Mae as of the end of September, “subject to certain claims Bank of America does not expect to be material,” according to a press release from BofA.
