Fannie Mae could force Flagstar Bancorp Inc. of Troy, Mich., to sell some of its $658 million of mortgage servicing contracts at a loss, people briefed on the matter said.

Fannie, which owns or guarantees the mortgages, wants servicing on late or defaulted loans to be handled by specialists, said the people, who declined to be identified because the talks are private.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.