Fannie & Fredddie tells banks take back your stinking mortgages
Started by Riversider
about 16 years ago
Posts: 13572
Member since: Apr 2009
Discussion about
http://online.wsj.com/article/SB10001424052748704342404574576213541631736.html As home loans sour at a rapid clip, mortgage finance giants Fannie Mae and Freddie Mac are aggressively bouncing back defectively underwritten loans to lenders. The result: higher loan-loss reserves for the lenders and new headwind for banks trying to escape the housing downturn. For lenders such as Wells Fargo &... [more]
http://online.wsj.com/article/SB10001424052748704342404574576213541631736.html
As home loans sour at a rapid clip, mortgage finance giants Fannie Mae and Freddie Mac are aggressively bouncing back defectively underwritten loans to lenders. The result: higher loan-loss reserves for the lenders and new headwind for banks trying to escape the housing downturn.
For lenders such as Wells Fargo & Co., Bank of America Corp., J.P. Morgan Chase & Co. and Citigroup Inc., which are among the largest sellers of mortgages to Fannie and Freddie, this could mean buying back souring loans at a loss.
Through Sept. 30, Freddie Mac put back about $2.7 billion of single-family mortgages to lenders, more than double the $1.2 billion of a year earlier. Freddie Mac and Fannie Mae don't lend directly to consumers but buy or guarantee home mortgages from lenders.
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Response by 30yrs_RE_20_in_REO
about 16 years ago
Posts: 9881
Member since: Mar 2009
Too bad they can't go retroactive with this..........
Ignored comment.
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Response by notadmin
about 16 years ago
Posts: 3835
Member since: Jul 2008
"Too bad they can't go retroactive with this.........."
a loan with Fannie or Freddy guarantee that has bad underwriting (lack of documetation income is the most common) ALWAYS came back to hunt the underwriter and loan holder. FNM and FRE were always good at enforcing this. as a taxpayer, i cannot be more grateful for this. the game is: underwrite crappily a conforming and it will come to hunt the underwriter and holder down teh road if it defaults.
Too bad they can't go retroactive with this..........
"Too bad they can't go retroactive with this.........."
a loan with Fannie or Freddy guarantee that has bad underwriting (lack of documetation income is the most common) ALWAYS came back to hunt the underwriter and loan holder. FNM and FRE were always good at enforcing this. as a taxpayer, i cannot be more grateful for this. the game is: underwrite crappily a conforming and it will come to hunt the underwriter and holder down teh road if it defaults.