Freddie Offers to Buy Back 48 MBS Pools

Freddie Mac says it will buy back, at market prices, any of 48 mortgage pools totaling $178 million that contain loans involving "unacceptable refinance practices" by a loan broker that was doing business with one of its seller/servicers.The company made the announcement after the market closed April 13, noting that it is investigating a "limited number of loans" where a mortgage broker paid kickbacks to consumers who were willing to refi their mortgages at above-market rates. A Freddie Mac spokeswoman said the consumers agreed to refi the loans at higher rates because the broker gave them "cash compensation" for doing so. The mortgages that were sourced to Freddie through National City Mortgage are now prepaying at a noticeable pace. Both Freddie and NatCity are investigating the matter. Saying it recently discovered the problem, the government-sponsored enterprise could not quantify how many loans are involved but said at least 48 pools are affected. "It could be just one loan per pool," said the spokeswoman. Freddie declined to identify the broker.