The GSE’s aren’t letting up on their mortgage-lending customers/adversaries:
Fannie Mae asked banks to buy back about $14 billion of loans for the first half of this year, compared with $12.3 billion in the same period last year. Banks including Wells Fargo and PNC have blamed changes in behavior at the GSEs for an increase in pending claims.
“Fannie Mae has not changed its criteria for evaluating loans for potential repurchase,” Andrew Wilson, a spokesman for the Washington-based firm, said in an e-mailed statement. “What changed was the volume of loans from 2005-2008 that did not meet our standards and therefore must be repurchased by lenders.” [Emph. added.]
This is of course the opposite of great for bank earnings. To cite one instance, Bloomberg says BofA took $1.5 billion of mortgage-related costs in the first half of the year, including repurchase-related reserves. And a lot of the repurchase claims are bogus on their face. If a mortgage written in 2005 is only going bad now, for example, the problem wasn’t bad underwriting. . . . P.S. If you’re wondering why lenders’ underwriting standards have lately become ridiculosly high, wonder no further. . .