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SEC Filings

8-K
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 8-K on 01/07/2013
Entire Document
 


The resolution agreement also provides that:

 

   

Fannie Mae will release Bank of America from current and future repurchase liability in connection with seller representations and warranties on the loans covered by the agreement, except for repurchase obligations arising out of specified excluded defects (for example, certain violations of our Charter Act);

 

   

Fannie Mae will retain ownership of all of the loans covered by the agreement, other than the approximately 30,000 loans that Bank of America will be repurchasing and any additional loans repurchased by Bank of America in the future due to an excluded defect;

 

   

Bank of America will continue to be responsible for certain payment and related obligations with respect to mortgage insurance rescissions, cancellations and denials on the loans covered by the agreement, which obligations are in addition to the cash payment and the repurchase price described above; and

 

   

Bank of America will continue to be responsible for its servicing, third-party indemnification and recourse obligations with respect to the loans covered by the agreement.

The resolution agreement addresses substantially all of our outstanding repurchase requests made to Bank of America. As of September 30, 2012, $10.8 billion, or 67%, of our $16.2 billion in outstanding repurchase requests to all our mortgage seller/servicers, as measured by unpaid principal balance, had been made to Bank of America. Accordingly, the amount of our outstanding repurchase requests will decrease substantially in the first quarter of 2013 as a result of the resolution agreement. The dollar amounts of our outstanding repurchase requests provided in this paragraph are based on the unpaid principal balance of the loans underlying the repurchase request issued, not the actual amount we have requested from the lenders. In some cases, we allow lenders to remit payment equal to our loss, including imputed interest, on the loan after we have disposed of the underlying property, which is less than the unpaid principal balance of the loan. As a result, we expect our actual cash receipts relating to these outstanding repurchase requests to be significantly lower than the unpaid principal balance of the loan. These amounts do not include amounts relating to repurchase requests originating from missing documentation or loan files.

Approval of Servicing Transfer and Compensatory Fee Resolution Agreement

On January 6, 2013, we approved Bank of America’s request for our consent to transfer the servicing of approximately 941,000 loans from Bank of America to two specialty servicers. In connection with Fannie Mae’s approval of this servicing transfer, on January 6, 2013, Fannie Mae and Bank of America entered into an agreement (the “compensatory fee agreement”) to resolve outstanding and certain expected compensatory fees owed by Bank of America due to delays in delinquent borrower resolution timelines. Pursuant to the compensatory fee agreement, Bank of America will make an initial payment to Fannie Mae of $1.3 billion, which amount represents a portion of the compensatory fees expected to be owed based on the parties’ initial estimates. Fannie Mae and Bank of America will follow a schedule and process identified in the compensatory fee agreement to mutually determine the final amount of compensatory fees owed.

 

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