Lenders Facing Increased Repurchase Risk
Lenders who sell the loans they originate to Fannie Mae and Freddie Mac are facing increased risk of being required to repurchase bad loans.
This is called “repurchase risk” and it is on the rise with major mortgage lenders, including B of A, JP Morgan Chase, and Ally Financial (formerly GMAC Mortgage).
B of A inherited a boatload of those loans when it bought Countrywide Home Loans and JP Morgan Chase also ended up with a similar situation when it bought Washington Mutual during the 2008 financial crisis.
Fitch Ratings is predicting that this is likely to impact earnings for several major mortgage lenders.
Source: DSNews.com article
August 24th, 2012 Posted in Inside Real Estate
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