What We're Hearing

It's all about making someone pay, isn't it? When Fannie Mae and Freddie Mac get stuck with a delinquent loan they try to force a seller/servicer to repurchase the mortgage. Of course, they have that right, depending on 'reps and warranties,' the underlying contractual terms, and (this is the big one) fraud. As NMN's Brian Collins reported recently, the GSEs are trying to get some of their largest seller/servicers to repurchase millions of dollars in troubled loans. Meanwhile, the lenders try to recoup their losses via claims they put in with mortgage insurance companies. But the MIs -- which have already shelled out billions in claim payments -- aren't rolling over so easily anymore. In a complaint filed in Superior Court of California, Bank of America alleged that MGIC is denying "millions of dollars in valid mortgage insurance claims" the lender has submitted. A spokeswoman for BoA -- the nation's largest funder of residential loans -- would not discuss the situation in depth with our sister publication American Banker. MGIC says in a Securities and Exchange filing that it will "vigorously" defend itself against the BoA lawsuit...