The Battle Between Bank of America And Fannie Mae Continues

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

The battle between Bank of America and Fannie Mae continues.  Bank of America announced late last week that it will cease to selling off its refinance mortgages to Fannie Mae.  This battle between Bank of America and Fannie Mae is not good for anyone, especially present and future Bank of America Borrowers.

This latest decision by Bank of America comes as a result of buybacks imposed on them by Fannie Mae.  For those who are not familiar with the term "buyback" it simply means that Fannie Mae made Bank of America take back what Fannie Mae deemed to be bad loans that it bought from Bank of America.

Bank of America claimed that because of "contractual delivery commitmentsand variances" that were "inconsistent" with past requirements caused them to take this action.  I am not a fan of Bank of America, but there is a lot of truth in what they are stating.  Lenders all over have been having to buyback loans that they never had to buyback before, for the most ridiculous reasons.  To make it worst Fannie Mae is making these decisions months after the loans close, and without any warning that they have tightened their standard.

According to a spokesman for Bank of America, Dan Frahm "This decision will not affect the credit available to our customers, and we will rely on other sources of liquidity to continue to ensure we are lending to our customers and supporting the housing market recovery".

Only time will tell how this will all play out and what impact it has on the Lending Industry.

 

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 Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Roland Woodworth 02/28/2012 04:25 PM
  2. Gabe Sanders 03/04/2012 07:46 PM
Topic:
ActiveRain Community
Location:
Connecticut
Groups:
Realtors®
Mortgages
Real Estate Rookie
Tags:
bofa fannie mae

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Rainmaker
641,688
Kathy Sheehan
Bay Equity, LLC 770-634-4021 - Atlanta, GA
Senior Loan Officer

Gail, I wouldn't image that would have any impact on your loan mod.

Feb 28, 2012 08:28 AM #14
Rainmaker
569,544
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Are there still borrowers getting new loans from BofA?  I know that I steer buyers away from them any chance I get.  Still, as you say, it is not good for their workers & bad press is not good for the industry as a whole.

Feb 28, 2012 09:01 AM #15
Rainmaker
592,807
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Oh My!

George,

I hadn't even though of B of A's employees, most of them have been low paid and part time since 1985 with no benefits. I've never met one in person with any authority. I did have a few phone numbers a decade ago.  I guess I though of them as freed! Who ever puts and end to B of A will have to have a monument on a par with Lincoln.

One of their 25 year victims managers came to work for me, one of my favorite wholesalers hired her away. At least we got to talk. She still came back and interpreted lender to Spanish for me, a great lady.

Existing borrowers won't have any problems and you'll find new sources for your people.

I still think the losers are the stock holders, big losers will be the taxpayers.

Bill

Feb 28, 2012 09:34 AM #16
Rainmaker
157,428
Carol Pease
JP & Associates Realtors - Bastrop, TX
CRS, Broker-Associate 512-721-6320

I must have missed something here.  I thought we the  taxpayers bailed out the banks so that they could continue to lend money and keep the mortgage and real estate market afloat?   It doesn't look like BOA plans to continue long term residential lending.  Something stinks here!!!!

Feb 28, 2012 09:39 AM #17
Rainmaker
869,561
Ann Hayden
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Chesterfield, MO
SelectAnn.com

George,

The tax payer loses again??

Ann Hayden in Wildwood, MO

Feb 28, 2012 10:57 AM #18
Rainer
125,329
Laurie Clark CRB Angel Realty LLC Your Monument Realtor 719-502-6572
CRB-CCSS-ASD-HBS-RSD-Denver Short Sale Agents - Monument, CO
Angel Realty, LLC

Congrats on the feature! Thanks for the update. Sounds like the tax payer is getting the shortest end of the stick, while consumers are left hanging and B OF A and Fannie Mae duke it out. Should be interesting to see the ramifications down the line. Thanks for sharing and have a great week.

Feb 28, 2012 11:41 AM #19
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

From what I read BoA will continue selling their loans to Freddie Mac--they didn't make BoA buy back the bad ones. Can't blame BoA from choosing not to sell to Fannie Mae in the future. When the loans go bad, Fannie expects BoA to buy them back. Fannie is a government entity now.

Feb 28, 2012 11:44 AM #20
Ambassador
1,725,101
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

George.....

It will be interesting to see how this all plays out, and it will have an impact on lending in the future!

Feb 28, 2012 12:39 PM #21
Rainmaker
1,077,478
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

George, thanks for writing such an informative post. These wouldn't happen to be any Countrywide loans, would they?

Sharon

Feb 28, 2012 12:41 PM #22
Ambassador
1,429,418
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

George,

Bank of America doesn't have a great deal of credibility in the industry...in my opinion. This just reinforces my opinion.

Rich

Feb 28, 2012 03:39 PM #23
Rainmaker
589,190
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired

Hi George,

FNMA has been losing a BILLION dollars a month. And it is OUR money.

I endorse them pushing back at the banks that are causing this intolerable loss of money.

As far as BofA? Let them whine all they want!

Phil

Feb 28, 2012 05:59 PM #24
Rainer
105,056
Rusty Wright
KELER WILLIAMS Elite - Lancaster, PA

This will tie up a lot of money for B O A . So the will all be portfolio loans on their refi's ???????????

Feb 28, 2012 06:20 PM #25
Ambassador
1,873,795
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

 

 

Is hard for me to side with BofA in any level.. this came close. . but . .not really. They deserve everything they get!

Feb 28, 2012 08:35 PM #26
Rainmaker
1,720,601
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

George, another interesting issue happening in this lending forum ...B of A has been good to my short sale clients as of late but I will bite my tongue here.

Feb 28, 2012 09:11 PM #27
Rainmaker
712,439
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

It's tough to survive in any activity when the rules change months after the fact. It's easy to see why they'd want to get out of this line of business with these types of surprises.

Feb 28, 2012 09:17 PM #28
Rainmaker
749,818
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

Hi George, I've had major problems with B of A and short sales. Takes forever to get an approval. I do not feel for them but will be interesting to see how this all plays out.

Feb 28, 2012 09:24 PM #29
Ambassador
2,495,138
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

George, very few of us are fans of big banking, but if B of A were to collapse, the repercussions would be world wide and that is never a good thing. Banks have failed before, but if one this large goes down there will be a big void to fill and that will really slow the recovery.

Feb 28, 2012 09:54 PM #30
Rainmaker
2,013,537
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Fannie Mae is no angel. But none of them is. My biggest complaint about Fannie Mae we've got the government telling homeowners to stop making their mortgage payments if they want to do a short sale. As for B of A, it explains why some of our largest mortgage companies are no longer doing loans with them. If a homeowner insists on doing a loan with B of A, he or she probably has to go directly to them, which doesn't necessarily ensure the best rate or terms.

Feb 28, 2012 10:37 PM #31
Ambassador
622,605
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

George: Thanks for the post. I think what BofA is saying is they don't want to be involved in mortgage lending anymore. They don't really have the cash as evidenced by their recent announcements of no cash out refi's anymore and telling customers to check back in 60-90 to try and refinance then. I talked with a loan officer I know with BofA and he insisted business was good and this wouldn't hurt them. I say he has drunk the koolade big time. No one is very excited about BofA right now, least of all the realtors. I personally don't think this will affect the market too much. Someone else will step into the void. Plus, poor service by anyone (in this case BofA) hinders our whole industry. Just my .02. Thanks again for the post. Have a great day!

Feb 29, 2012 01:52 AM #32
Rainmaker
1,278,199
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, if this has been answered in the comments above, I appologize for re-hashing it, but how can BoA be forced to buyback?  What ever happened to contracts and what was written in them?

Feb 29, 2012 07:52 AM #33
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