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Home | Tag Archives: Loan Repurchases

Tag Archives: Loan Repurchases

Report: GSEs Close to Reaching Agreement With Lenders to Minimize Repurchase Risk


*+-In a separate agreement the GSEs and FHFA are also reportedly considering programs that could reopen the door to guarantee some mortgages with down payments as low as 3 percent, including loans to first-time homebuyers, according to the Wall Street Journal. Fannie Mae stopped taking such loans last year, while Freddie Mac stopped guaranteeing them years ago.

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Is Mortgage Market Deconsolidation Temporary or Here to Stay?

*+-In 1998, the top 10 mortgage lenders held around 40 percent of the market. By 2010, their share increased to nearly 80 percent; since then, it's dropped down to around 60 percent. Why the decrease? Because only five of the top 20 single-family mortgage originators in 2006 remain active today. So what's driving the big guys out--market cycles or market restructuring? And will the current trend of favoring smaller lenders and servicers last forever?

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Bank of America and Freddie Mac Settle Repurchase Claims

*+-Bank of America has agreed to pay Freddie Mac $404 million to be released from existing and future repurchase claims on approximately 716,000 loans originated in the last decade by BofA and sold to the GSE. The payment also compensates Freddie Mac for past and future mortgage insurance-related losses on the loans, but doesn't cover loan servicing obligations or private-label securities.

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JPMorgan Strikes Deal with Mortgage Investors

*+-JPMorgan Chase & Co. has reached a $4.5 billion agreement with 21 institutional investors to settle mortgage repurchase and servicing claims on 330 residential mortgage-backed securities (RMBS) issued by J.P. Morgan, Bear Stearns, and Chase. The group of investors supports the arrangement, according to their legal representative, and has asked the trustees to accept JPMorgan's offer. The bank says it is appropriately reserved for this and any remaining RMBS litigation matters.

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Lenders Incur Visible Risk from Hidden Borrower Debt

*+-Over the past few years, lenders and underwriters revamped their standards to reduce risk, but Equifax says there's one challenge many lenders still have difficulty combating--undisclosed debt. In a recent white paper, the credit bureau published results of its research into undisclosed debt and its recommendation for how to deal with this difficult hazard. Ultimately, Equifax said, ""The results are somewhat surprising and disturbing.""

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GSEs to Return Another $39B to Taxpayers

*+-Both Fannie Mae and Freddie Mac continue to see strong profits as the housing market improves. With the release of their third-quarter results the GSEs announced they will be making substantial payments to the U.S. Treasury in December--$8.6 billion from Fannie Mae and $30.4 billion from Freddie Mac. Together, the two companies will have paid back about $185 billion to taxpayers as of December, nearly equaling the $188 billion in bailout money provided to the two mortgage financiers.

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Ally Settles with Government Agencies over Toxic Mortgages

*+-Ally Financial is the fifth bank to reach a settlement with the federal government over soured mortgage bonds sold to Fannie Mae and Freddie Mac prior to the housing and foreclosure crisis. The bank announced Tuesday that it settled the 2011 lawsuit brought by the Federal Housing Finance Agency over toxic mortgages. Ally also reached a separate settlement with the FDIC to resolve pending litigation related to the company's legacy mortgage dealings.

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JPM Settlement Means Banks May Need to Increase Litigation Reserves

*+-JPMorgan Chase's $4 billion settlement with the Federal Housing Finance Agency (FHFA) reached late last week ""sets a relatively high bar"" for the 13 other banks still facing litigation from the federal agency, according to Fitch Ratings, which suggested Tuesday that some of the banks may need to increase their litigation reserves before settling. The $4 billion is about 12 percent of the original face value of the private-label mortgage-backed securities for which FHFA sought damages.

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JPMorgan Settles with FHFA, GSEs over Bad Loans

*+-JPMorgan Chase reached agreements to resolve its mortgage-backed securities litigation with the Federal Housing Finance Agency (FHFA) and rep and warranty repurchase claims from Fannie Mae and Freddie Mac. Altogether, the bank has agreed to pay $5.1 billion to the GSEs.

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Wells Fargo, JPMorgan Release Mixed Earnings Reports

*+-Wells Fargo and JPMorgan Chase are the first of the big banks to release their earnings summaries for the third quarter. The two reports paint a very mixed picture. Wells Fargo raked in record profits during the July-to-September period, while JPMorgan Chase reported its first-ever loss under CEO Jamie Dimon's watch as a result of a hefty one-time legal expense, which included reserves for litigation and regulatory proceedings.

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