Bank of America Gets Out of The Game At A Price

Below is the latest article generating out of Washington with specificity to Bank of America attempting to shed the dead weight of foreclosures.

WASHINGTON, D.C. – Fannie Mae (FNMA/OTC) today announced a comprehensive resolution with Bank of America, including a $10.3 billion agreement on existing and prospective repurchase requests on a specified population of loans and an additional payment of $1.3 billion to address servicing issues.

The agreement covers current and future repurchase obligations related to loans with an outstanding unpaid principal balance of $297 billion as of November 30, 2012 that were originated between January 1, 2000 and December 31, 2008. As part of the agreement, Bank of America will make a cash payment to Fannie Mae of $3.55 billion. In addition, Bank of America will repurchase approximately 30,000 loans, which  have the potential to cause significant future losses to Fannie Mae, paying par plus accrued interest, for an additional approximately $6.75 billion, subject to certain adjustments.  As a result of this resolution, the amount of Fannie Mae’s outstanding repurchase requests will decrease substantially in the first quarter of 2013.

You can read the full article on FannieMae’s website.