Freddie Mac is getting tough on seller/servicers that are not meeting their obligations to buy back mortgages that went afoul of the GSE's underwriting guidelines.
The government-sponsored enterprise currently has $5.6 billion in buyback requests outstanding with 24% of those requests more than 120 days old as of June 30.
To ensure more timely payments, Freddie said it has "begun to require certain seller/servicers to commit to plans for completing repurchases, with financial consequences or with stated remedies for non-compliance, as part of the annual renewals of our contracts with them."
According to its earning statement, Freddie collected $1.4 billion from loan re-purchases in the second quarter, compared to $911 million a year ago.
Fannie Mae reported that its seller/servicers re-purchased $1.5 billion of bad loans in the second quarter, compared to $946 million in the year-ago quarter.
"Our primary mortgage servicer counterparties have generally continued to meet their obligations to us," Fannie said in its second quarter securities filing. The GSE warns, however, that the growth of delinquent loans "may negatively affect the ability of these counterparties to continue to meet their obligations to us in the future."
Fannie expects buyback requests to remain high in the second half. But it did not disclose the amount of its re-purchase requests that have not been paid.
