Bank of (sc)America Plays Symbolism

This is truly an amusing start to my Friday…

Bank of America Corp., the second-largest U.S. lender by assets, will stop selling new home loans to Fannie Mae after a dispute over faulty mortgages.

Starting this month, the Charlotte, North Carolina-based company will deliver only loan modifications and refinancings to U.S. government-controlled Fannie Mae, the bank said today in its annual filing with securities regulators.

Wow, that’s a big deal, right?

Well, no.

The kerfluffle stems over Fannie’s demand that BAC repurchase loans that turned out to have been sold to them with fraudulent misrepresentations. You know, things like “I make $200,000!” when in fact the guy’s a line worker at McDonalds’ and makes $8/hour? Yes, that sort of thing.

Most of these appear to have originated at Countrywide, which was given a handslap and tiny fine, and it’s former CEO, Mr. Tan Man Mozilo, was allowed to walk off into the sunset with the vast majority of his “salary” and “bonus.”

He sure did bone us — millions of Americans, that is.

But here’s the reason it doesn’t matter. Fannie and Freddie are now both effectively the same company, since both are now in conservatorship and operated by the Federal Government. And Bank of America isn’t dumb enough to kill its own lending operations — they’re simply going to change the name of the GSE they sell to, and send it to Freddie instead.

Dubrowski said the decision won’t have a material impact on its business. The bank has ended the past practices of Countrywide, “which had a significant relationship with Fannie Mae,” he said.

Well yes, BAC has, but as I reported the other day it appears to have create all sorts of fancy new practices, including billing servicing charges for mortgages that don’t exist any more.

A new day, a new way to “make money” and “earn our bone-us”, right?