I sue you, I get billions from you, I turn around give you back a portion of the billions.

• Bank Of America Settles With Fannie, Freddie For $3 Billion Over Bad Counrtywide Loans
• Countrywide V.I.P Report: “Friends of Mozilo” Include Fannie Mae Exec.
• Report: Countrywide Won Influence With Discounts
• Fannie Refused to Punish Countrywide for Bad Debt, Lockhart Says
• Rep. Darrell Issa probes Fannie Mae, BofA deal, Was This a Back-Door Bailout?

Reuters-

Fannie Mae agreed to pay Bank of America Corp about 20 percent more than it was contractually obligated to last year in order to transfer the servicing of troubled loans to another firm, a report by a watchdog found.

In a report to be issued on Tuesday, the inspector general for the Federal Housing Finance Agency urges the regulator to ensure Fannie Mae applies more scrutiny to the pricing of such transactions and possibly revise its contracts with mortgage servicers.

“FHFA should ensure that Fannie Mae does not have to pay a premium to transfer inadequately performing portfolios,” the report says, referring to the regulator of Fannie Mae and sibling Freddie Mac.

The watchdog, however, called the effort to shift troubled loans to companies more skilled at working with borrowers a “promising initiative” that could reduce loan losses for government-controlled Fannie Mae and taxpayers. It could also reduce foreclosures.

[REUTERS]