Wednesday, December 1, 2010
Fannie, Freddie get tough on loan buybacks
Government-owned mortgage companies Fannie Mae and Freddie Mac are pushing back against private banks that have failed to buy back loans that didn't satisfy underwriting standards, according to Bloomberg News. In total, roughly $13 billion worth of loans filed in buyback requests have not been fulfilled by lenders including Bank of America and JPMorgan Chase, according to Fannie and Freddie. Those lenders could potentially face penalties if they don't reabsorb the loans, the government-run entities say. But some large lenders claim that the loans do, in fact, meet underwriting requirements, while smaller banks say that buying back the loans at all could sink them.