Countrywide Was Fannie Mae’s Top Customer

October 12, 2009 No Comments »

countrywide

Oh, so that’s why Fannie Mae was placed under government conservatorship

Countrywide/Bank of America was the top customer of government financier Fannie Mae in 2008, according to an HMDA analysis conducted by National Mortgage News.

The combined mortgage operation of the two banks/lenders accounted for 18 percent of all loans sold to Fannie during 2008, the year in which it was taken over after being rattled by record billion dollar losses.

Countrywide, which was purchased by Bank of America in mid-2008, still managed to sell $86 billion in mortgages to Fannie that year (BofA/Countrywide sold a combined $112 billion).

Apparently the former top mortgage lender had a “strategic alliance” with the government-sponsored entity, whereby it received volume discounts on the guarantee fee charged by Fannie in exchange for the bulk of its loans.

Unfortunately, it turned out that a lot of Countrywide’s loans weren’t as stellar as once thought, and it wasn’t long before that was reflected in Fannie’s stable of mortgages.

Fannie Mae purchased a total of $631 billion in mortgages from all of its seller/servicers in 2008, with Wells Fargo the second largest customer with $68.9 billion in sales.

That figures rises slightly to $70.9 billion, if you factor in sales from Wachovia, which was purchased by Wells late last year.

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