Thursday, August 5, 2010

Banks May Buy Back Faulty Mortgages? - bloomberg

N.Y. Fed May Require Banks to Buy Back Faulty Mortgages, Assets - Bloomberg: "The Federal Reserve Bank of New York may seek to require banks to buy back its holdings of faulty mortgages and other assets acquired through the rescues of Bear Stearns Cos. and American International Group Inc., a spokesman said.

“We are involved in multiple efforts related to exercising our rights as investors in non-agency RMBS or CDO securities,” New York Fed spokesman Jack Gutt wrote in an e-mail, referring to residential mortgage-backed securities and collateralized debt obligations.

Steps include “those that require originators to repurchase ineligible loans,” Gutt wrote, referring to ones that aren’t backed by federal entities and violate bond contracts. “These efforts support our primary goal of maximizing the value of these portfolios on behalf of the American taxpayer.”"

Further in the report was this quip:
"Investors suspect that loan servicers -- who are responsible for pursuing repurchases and handling billing, collections and loan modifications -- may not be seeking as many as possible, in part because other units of their companies would be the ones required to take back the debt, according to the letters."

EDITORS NOTE: Will this help or hurt those trying to fight foreclosures based on secularization?

Please retweet this blogpost if you find it helpful in learning about government mortgage homeownership and bank loan modifications


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