CHARLOTTE, N.C. – Bank of America, the nation’s largest mortgage lender, yesterday announced it has stopped selling new loans to Fannie Mae as the two continue to battle in court over billions of dollars worth of mortgages gone bad the banking giant sold to Fannie.
Starting this month, BofA only will deliver loan modifications and refinancings to Fannie Mae, the bank said.
BofA, which is being sued by Fannie, said in a filing with the Securities and Exchange Commission its commitments with Fannie had expired and “our ongoing differences with (Fannie Mae) in other contexts, including repurchase claims” influenced the decision to not renew the commitments.
The banking giant said the dispute will not affect new mortgages and it will either hold the mortgages on its books or sell them to Freddie Mac, with which it settled separate legal claims last year.
“We have ended the past practices of Countrywide, which had a significant relationship with Fannie Mae,” Bank of America said in a statement. “This decision will not affect the credit available to our customers.”
Fannie Mae’s suit involves mortgages made by Countrywide Financial, which BofA acquired in 2008. Countrywide was the biggest residential mortgage customer of Fannie Mae at the time.
