BofA Ends Freddie 'Alliance'

Bank of America, Charlotte, the fifth-largest seller of loans to Freddie Mac, has ended its strategic alliance with the government-sponsored enterprise.BofA's decision to sell some of its conforming production to Fannie Mae (as well as continuing to sell to Freddie) is just the latest example of a trend toward the fraying of such alliances. For instance, Countrywide Home Loans, Calabasas, Calif., which has an alliance agreement with Fannie Mae, is now actively selling some of its production to Freddie. Jeff Lebowitz, who runs the Mortech study, called the strategic alliances "meaningless." A former executive at Fannie Mae, Mr. Lebowitz said: "It's just a venture in price cutting." A spokeswoman for BofA said the company "will continue to work closely with Freddie Mac. But at this point we are going to return to a competitive open market." BofA originated $84 billion in mortgages last year, $64 billion of which were conforming. A Freddie Mac spokesman declined to comment on BofA's action. (See the Feb. 3 issue of National Mortgage News for full details.) The companies can be found online at http://www.bankofamerica.com and http://www.freddiemac.com.