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Mortgage Crisis Watch Business and legal issues affecting: loan repurchases | mortgage-backed securities | mortgage insurance

Tag Archives: Buy-Back

Massachusetts Sues Fannie and Freddie for Blocking Home Buybacks

Earlier this month, Massachusetts Attorney General Martha Coakley initiated an action against Fannie Mae, Freddie Mac and the Federal Housing Finance Agency for allegedly illegally impeding non-profit foreclosure buyback programs. These buyback programs purchase properties in foreclosure and then resell the properties to the prior owners at an affordable price, helping low-income residents keep their homes…. Continue Reading

Mortgage Foreclosure Settlement

Skepticism We have long been skeptical of most loan “repurchase” or “indemnification” demands made by big banks against the third-party originators (i.e., correspondent lenders) who sold those loans to the big banks many years ago. Our skepticism arises not just from a loan-by-loan analysis of the demands being made against our clients (the correspondent lenders)…. Continue Reading

Banks’ After-The-Fact Appraisals Fuel Buyback Demands

Justin T. Hilley  of HousingWire.com reports that audits done by Quality Mortgage Services (“QMS”) “indicate that many demands by financial institutions that lenders buy back mortgages are based on fraudulent appraisal schemes in an attempt to increase the success of repurchase claims.” According to Hilley’s report, QMS “believes some appraisers are systematically being pressured to use a… Continue Reading

The FHFA’s New Buy-Back Statement

Higher Degree of Certainty and Clarity? The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, released a statement yesterday saying it was working with those two entities, which are the nation’s major government-backed mortgage securities investors, to “provide lenders a higher degree of certainty and clarity around repurchase exposure and liability… Continue Reading

Residential Capital Files Bankruptcy: Part 1 of 2

Subsidiary of Ally Financial Inc. Files Chapter 11 Bankruptcy Residential Capital, a residential mortgage loan originator and a subsidiary of Ally Financial Inc. (formerly GMAC), filed for Chapter 11 bankruptcy protection in New York on May 14, 2012. Ally Financial was the financial arm of General Motors and, while taxpayers currently own only approximately 25%… Continue Reading

Bank of America Lowers Reserves in Response to Buy-Back Demands

Hard Stance? Bank of America has lowered its reserves established for payments in response to mortgage buy-back demands. The announcement, coming in the banking giant’s quarterly earnings report, indicates BofA set aside less money in the first quarter of 2012 to cover the cost of “repurchase” demands than it had at any time since the… Continue Reading

Wells Fargo’s Shameful List

No Wrongdoing Required for Inclusion on Wells Fargo’s Exclusionary List Loose Underwriting Standards Imagine that you work at a company that has originated residential mortgage loans for years, following the documentation and verification requirements and guidelines established by the major banks to which your company typically sells those loans. Imagine that Wells Fargo is one… Continue Reading

Inaccurate Appraisals: Weakest Buy-Back Demand

Misrepresentation? We have long held the view that investors’ buy-back demands based on allegedly inaccurate appraisals are about the weakest type of buy-back demand imaginable. Think about it: the two fundamental components of such a demand are that the loan originator made a “misrepresentation,” and that the misrepresentation concerned the appraised value of the property… Continue Reading