Friday, October 1, 2010

Lenders Balk at Buying Back $11 Billion in Bad Loans from Fannie Mae and Freddie Mac

This really going to affect what homes make it on the market on a timely fashion.  I don't people foresaw these problems in 2008.
When a homeowner breaks his or her contract by not making a mortgage payment, the lender often has a simple remedy.  It takes back the house and sells it to someone else to reclaim its loan.

But what happens when lenders themselves fall back on their contractual mortgage loan obligations with federal government agencies?

Nothing, it seems, at least at this juncture.

Banks that sold bad mortgages to Fannie Mae and Freddie Mac promised to buy the loans back, according to their regulator. But many of the nation's largest institutions aren't living up to their end of that commitment, reports
 This follow an earlier article from last week

Read it all

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