Fannie Mae reported a 72% spike in loan repurchase requests in the first quarter, a sign that the GSE’s legacy portfolio is continuing to deteriorate in quality.
In its recent earnings statement, Fannie said outstanding loan repurchase requests totaled $8.6 billion as of March 31, up from $5 billion in the fourth quarter.
"We expect that the amount of our outstanding requests could remain high in 2011," the GSE said in a securities filing.
In Q4 Fannie resolved $3.9 billion of buyback claims with Bank of America, with that lender agreeing to pay the GSE $1.3 billion. (Much of B of A’s problems are tied to the old Countrywide Financial Corp. franchise.)
Meanwhile, over at Freddie Mac, loan repurchase requests have been declining for three consecutive quarters. In the first quarter, Freddie reported $3.4 billion of outstanding buyback requests. Back in Q2 2010 requests were almost double at $6.2 billion.
During the first quarter, Freddie said it "recovered amounts that covered losses with respect to $1.2 billion of UPB of loans associated with our repurchase requests.”
Fannie reported that it received compensation on buyback requests tied to $1.6 billion of mortgages. Both GSEs generally do not say how much they recovered unless a seller/servicer reveals such information in a SEC filing.
