The Banking and Strategy Initiative

Chillin' out till it needs to be funded

BofA sells 3% of its mortgage portfolio to Fannie Mae

Logo of the Federal Housing Administration.

Image via Wikipedia

Staving the servicing cost of undocumented Loans?

Part of its servicing branch, the 400,000 mortgages with an unpaid principal of $73 bln will be passed to Fannie Mae in four monthly slugs of 100,000 mortgages each It is unclear as to the discount on the portfolio as BofA still nets $500 mln from Fannie Mae for the transaction.

This particular tranche probably helps BofA to also remove such unwanted loans with incomplete documentation which have been whittling away at  a fast clip since 2008 as the “bad bank” in most banks. BofA’s target was to reduuce such unwanted loans by half on its balance sheet

AIG started a new litigation this week asking BofA to pay it $10 bln for its $28.5 bln portfolio for which BofA was the issuing principal

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