Fannie Mae Reaches Agreement with BOA to Address Repurchase Requests

Fannie MaeFannie Mae announced it has reached an agreement with Bank of America and its affiliates – BAC Home Loans Servicing, LP, and Countrywide Home Loans, Inc. – to address outstanding repurchase requests for residential mortgage loans with an unpaid principal balance of approximately $3.9 billion delivered to Fannie Mae by affiliates of Countrywide Financial Corporation. Bank of America agreed, among other things, to a resolution amount of approximately $1.52 billion, consisting of a cash payment of $1.34 billion made by Bank of America on December 31, 2010, and credits for payments recently made or to be made by them. Fannie Mae president and CEO Michael J. Williams says the agreement substantially resolves outstanding repurchase requests on 12,045 loans sold to Fannie Mae by Countrywide, addresses 5,760 other loans sold to Fannie Mae by Countrywide and permits the GSE to bring claims for any additional breaches of  representations and warranties that are identified with respect to those loans. The move set off a rally in bank stocks.

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