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Tag Archives: Loan Repurchases

Walnut Place Withdraws from $8.5B Countrywide Settlement

A major player in the ongoing Countrywide settlement dropped its suit against the defunct mortgage unit on Monday. According to news services, Walnut Place, otherwise known as Baupost Group, withdrew objections to a proposed $8.5 billion settlement currently under way with Bank of America, which bought Countrywide in 2008. Several reports held that a tentative deal had been reached by institutional investors last year to settle allegations of systematic misrepresentation.

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Risks of Eminent Domain in California: Fitch

In a commentary, Fitch stated the proposed uses of eminent domain in California could negatively affect private label RMBS performance. Recently, the board of supervisors of San Bernardino County voted to form a joint powers authority with California cities Fontana and Ontario to look into the option of using eminent domain to seize underwater mortgages. Fitch said one proposal, which is of particular concern, indicates that only current and delinquent mortgages, not those in foreclosure, would be eligible. Thus, borrowers who would have stayed current on their payments could have their mortgage seized by the local, state, or county government. If eminent domain was to be used in such a way, then holders of the seized homes could experience losses, Fitch said.

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UK Academic Points to Affordable Housing Ideology as Culprit for Crisis

When hearing about the different narratives on the housing crisis, oftentimes the private sector is largely blamed. During an event hosted by The American Enterprise Institute (AEI) Wednesday, a recently published book was discussed which highlights a different perspective on the story of the housing market crash. Oonagh McDonald, a UK-based academic, wrote the book titled ""Fannie Mae and Freddie Mac: Turning the American Dream Into A Nightmare"" and asserts that the failures in the housing industry started with 'affordable housing ideology,' and was worsened by policy makers and the GSEs.

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With $2.7B Profit, Fannie Mae Ends Q1 Without Drawing Taxpayer Funds

Fannie Mae said Wednesday that it brought in $2.7 billion dollars in net income during the first quarter of this year, and for the first time since it was seized by the government in September of 2008, the company does not need a draw of taxpayer funds from Treasury to get out of the red. Fannie Mae says its improving numbers can be traced to lower credit-related expenses as the decline in home prices slowed and the company shed some of its REO holdings.

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Payment to Treasury Drags Freddie Mac to Net Worth Deficit

Freddie Mac reported net income of $577 million for the first quarter of 2012. That combined with $1.21 billion in unrealized gains on securities investments resulted in comprehensive income of $1.79 billion. The GSE's finances didn't sit in the black for very long, however. After a $1.8 billion dividend payment to its primary shareholder, the U.S. Treasury, Freddie's net worth was a deficit of $18 million. Looking at the GSE's loss mitigation numbers, short sales almost equaled the number of loan modifications during the first quarter.

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J.P. Morgan Announces Sale of Securities Backed by NPLs

J.P. Morgan recently announced the issuance of $132 million in commercial mortgage-backed securities (CMBS) backed by non-performing commercial real estate loans. According to the Wall Street Journal, the issuance is first time since the late 1990s. Prior to the securitization, the assets were owned by Rialto Capital Management, a real estate investment management company focused on distressed asset investment, management, and workouts.

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FHA Steps Up Lender Requirements to Limit Default Risk

The Federal Housing Administration (FHA) has announced new measures to strengthen standards for the lenders it works with - measures the agency says will help it better manage the risk that comes with insuring mortgages against default. The new regulations raise the bar in terms of lender performance when it comes to seriously delinquent and claim rates, and shores up the agency's processes for requiring lenders to cover losses from insurance claims paid on mortgages that involve fraud or don't meet FHA's underwriting guidelines.

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Citi’s $1.2B Fourth-Quarter Profit Misses Market Forecasts

Citigroup's fourth-quarter results fell far short of analysts' expectations, despite a 40 percent drop in credit losses from the previous year. The company reported net income of $1.2 billion, or 38 cents per share, for the fourth quarter of 2011. Analysts were looking for 50 cents per share. Company officials told investors that legacy mortgage issues are the single largest source of risk facing the U.S. banking industry. Citi saw loan buybacks go up 80 percent in 2011 as it stockpiled reserves for mortgage litigation costs.

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JPMorgan Posts $19B Annual Profit Despite Housing Hangover

JPMorgan Chase kicked off the earnings reporting season for major U.S. lenders on Friday with its announcement that the company earned a record profit of $19 billion for the 2011 fiscal year. The numbers still failed to meet analysts' expectations, and details of the earnings data show the company continues to struggle with legacy issues stemming from the housing downturn. The company doled out more than $3 billion in 2011 to cover legal proceedings related to its mortgage business.

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