Even chumps can awake

Fannie Mae going after banks that sold it crap mortgages.

Stuck with about $300 billion in loans to borrowers at least 90 days behind on payments, Fannie and Freddie have unleashed armies of auditors and other employees to sift through mortgage files for proof of underwriting flaws. The two mortgage-finance companies are flexing their muscles to force banks to repurchase loans found to contain improper documentation about a borrower’s income or outright lies.

The result: Freddie Mac required lenders to buy back $2.7 billion of loans in the first nine months of 2009, a 125% jump from $1.2 billion a year earlier. Fannie Mae won’t disclose its figure, but trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.

“Because taxpayers are involved, we’re being very vigilant,” said Maria Brewster, who oversees Fannie’s repurchase team. “No taxpayer should have to pay for a business decision that caused a bad loan to be sold to Fannie Mae.”

That’s all very nice, but I hope we’re going to see more than 3% of our money returned.

3 Comments

Filed under Uncategorized

3 responses to “Even chumps can awake

  1. pulled up in OG

    Speaking of chumps . . .

    RTM brouhaha because moderator Byrne casts tie-breaking vote in moderator pro tem contest – Joan Caldwell vs Paul Curtis.

    Vote is 99-99 w/ one abstention. Byrne’s tie breaker gives it to Caldwell.

    Wanna guess who abstained?

  2. Anonymous

    Re Fannie and Freddie: As usual, taxpayers will have to be satisfied with whatever scraps of kill are left after the lions of Wall Street and their attendant hyena-lawyers have fully gorged themselves.

  3. Greenwich Ex-Pat

    “Because taxpayers are involved, we’re being very vigilant,” said Maria Brewster, who oversees Fannie’s repurchase team. “No taxpayer should have to pay for a business decision that caused a bad loan to be sold to Fannie Mae.”

    I’ll just let that hang there….