Fannie Mae has paid $1.5 billion to a dozen banks that manage its massive home loan portfolio so that it can hire a companies it thinks will do a better job with loans in danger of foreclosure, according to a government watchdog report released Tuesday.
The report, issued by the inspector general for the Federal Housing Finance Agency, concludes that Fannie Mae is probably contractually required to pay a breakup fee in order to move these loans, but that in many cases the government-backed mortgage giant appeared to be paying millions of dollars too much.
The report does not say how much Fannie might have overpaid, only that the agency should not be paying more than the what the contract dictates. The inspector general found that while the contract allows for a breakup payment of twice the annual fees a bank would collect, Fannie has paid on average 2.3 times that amount in order to quickly close the transactions and forestall a bank from marketing the rights on its own.
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