What We're Hearing

It looks as though the loan "buy back" scourge has apparently taken down another nonbank. (For the full story see the National Mortgage News website later today.) Who's responsible for buy backs? Fannie Mae and Freddie Mac get much of the blame, but so do the "mega" banks that act as aggregators. As for investors that might serve as white knights for some of these struggling nonbank shops, private equity firms are worried about how deep buy backs might run. "When you have loans that are three and four years old getting called back, that's a problem," said one investment banker. "On every buyback, a nonbank loses money," he said...