So, is the loan buyback crisis (sort-of) over? Don't bet on it. In a new filing with the Securities and Exchange Commission, Freddie Mac notes that one way it manages credit losses is by forcing seller/servicers to repurchase questionable loans. The GSE, which lost $6.7 billion in the first quarter, has made calculations on "projected recoveries" from buybacks but hasn't yet shared those estimates with the public. Meanwhile, one investor I know said the secondary market for "kickback" loans has exploded over the past five weeks. A "kickback" loan is a performing mortgage that Freddie (or Fannie Mae) sends back to the seller/servicer...
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