Posted on Tuesday, February 2, 2010
Between them the GSEs have an estimated $300 billion in single-family home loans that are at least 90 days past due, the Wall Street Journal reports. And their teams of auditors are working overtime to weed through the files and pinpoint underwriting missteps or income discrepancies that would warrant a buyback by the selling institution.
According to analysis by the Journal, Freddie Mac required lenders to buy back $2.7 billion of loans in the first nine months of 2009, a 125 percent jump from $1.2 billion a year earlier. Fannie Mae wouldn’t disclose its figure, but the Journal cited trade publication Inside Mortgage Finance, who reported Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.
Biggest losers are likely to be Bank of America Corp., J.P. Morgan Chase & Co. and other large mortgage lenders who led the pack in originations when the housing bubble burst.
Big banks are also taking a hit from mortgage-backed securities (MBS) investors who are returning loans with underwriting flaws in bulk. A report from Barclays Capital found that during the first nine months of 2009, lenders repurchased just over $14 billion in loans.