Fannie Mae filed a complaint against Denver-based K.O. Realty Inc. in the U.S. Districts Court for the Northern District of Texas Dallas Division, arguing that it properly terminated its contract with K.O. and its owner Karen Frisone, court records say.

But the GSE's attempt to end this business relationship goes beyond their filing. K.O. is concurrently trying to prove in court that it lost a large portion of its business after Fannie Mae pulled back large volumes of business.

This alleged pull-back occurred after the firm's leader says she reported broker-related issues that she believed were either fraudulent or against Fannie policies.

The K.O. leader kept track of how one group of brokers in Denver set up office addresses and obtained work. Finding what she considered to be policy breaches and alleged fraud, she reported this information to Fannie. Fannie, based on court records, did not view the issue in the same light.

The relationship between K.O and Fannie eventually soured, which led the enterprise to file a court action to obtain the legal backing to terminate the contract.

K.O.’s counterclaim states the firm denies a substantial portion of Fannie's allegations.

The real estate broker is pursuing damages, claiming she lost business volume based on Fannie's decision to pull back business.

Fannie did not go into detail, but defended the GSE from Frisone's allegations.

"We expect our employees and the real estate professionals we work with to follow our standards in all interactions. While we cannot comment on the specifics of this matter, we believe the claims made by Ms. Frisone against Fannie Mae are without merit," a Fannie Mae spokesperson said. 

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