Sources: Fannie Mae Cuts Down on Loan Buyback Reviews
Fannie Mae–which has recovered billions of dollars in damages from mortgage bankers on buyback requests–is cutting down on due diligence reviews, trimming the workloads of vendors that play in that space, industry advisors told National Mortgage News.
One source familiar with the matter noted, “To my knowledge, they have not cut vendors,” cautioning that the cutback “is causing all of the reviewers to reduce and reallocate staff.”
This official added that one vendor working on buyback cases has seen its workload reduced to 1,500 files per month from 9,000 at one point.
Fannie Mae, one consultant said, is transitioning to more reviews of performing and newly originated loans. “I think that they will keep a stable of providers, but they are clearly trying to do the work in-house and relay heavily on technology.”
A spokesman for Fannie Mae declined to comment on the matter.
Repurchase requests from Fannie Mae and Freddie Mac have been a major financial headache for lenders of all different sizes, in particular the nation’s megabanks.
Bank of America, Wells Fargo & Co., JPMorgan Chase, Citigroup and Ally Financial–essentially the nation’s top-ranked funders–set aside almost $3 billion to cover buybacks in the first half of 2012.
As reported by National Mortgage News, buyback disputes between Fannie and B of A have soured relations between the two to the point where B of A is now selling just HARP loans to the GSE.
According to analysis of Home Mortgage Disclosure Act information by National Mortgage News, B of A in years past has been Fannie’s second largest customer behind Wells Fargo.