Seller-servicers for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. repurchased more than $3 billion in mortgages during the first quarter. But even more repurchase demands have yet to be met — with some of the country’s biggest lenders among those who are holding back.
Mortgage lenders repurchased around $1.8 billion in mortgages during the first-quarter 2010 from Fannie Mae, according to a public filing by the Washington, D.C.-based company. The figure was based on the principal balances of the loans.
Fannie said it also received $1.5 billion in claims payments from mortgage insurance companies during the first quarter.
The secondary lender noted that it issues repurchase demands after reviewing delinquent loans and identifying loans that don’t meet its underwriting and eligibility requirements. Repurchases are also required when the mortgage insurer rescinds coverage.
At Fannie’s government-controlled rival, Freddie Mac, first-quarter repurchases were $1.3 billion, jumping from $0.8 billion a year earlier, the company reported in its own public filing.
But some of the McLean, Va.-based firm’s seller-servicers have been unable to meet repurchase demands within the required time because they lack the financial resources. In addition, some larger seller-servicers have failed to make requested repurchases.
As of March 31, Freddie’s outstanding repurchase requests jumped to $4.8 billion from $3.8 billion three months earlier. Just over a third of the outstanding requests were more than 90 days old — including 30 percent of requests at three of Freddie’s larger seller-servicers.
“Our credit losses may increase to the extent our seller-servicers do not fully perform their repurchase obligations,” the filing stated. “Enforcing repurchase obligations with lender customers who have the financial capacity to perform those obligations could also negatively impact our relationships with such customers and ability to retain market share.”
But Freddie did note that it allows some lenders to provide indemnifications in lieu of making a repurchase.
Freddie reported that Wells Fargo Bank, N.A.; Bank of America, N.A.; and Chase Home Finance LLC accounted for 56 percent of its single-family mortgage purchase volume during the first quarter. Freddie’s top-10 seller servicers were responsible for 81 percent of activity.
