Wave of Repurchases Ahead

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Mortgage bankers can expect an increase in repurchase demands and denied mortgage insurance claims, according to an attorney with a Washington, D.C.-based law firm.

The attorney, Michael Waldron, is a partner at Patton Boggs LLP.

He made his comments on Capital Thinking, a radio show broadcast by The VoiceAmerica Talk Radio Network. Waldron was speaking on the show with MortgageDaily.com Publisher Sam Garcia about the Fourth Quarter Mortgage Litigation Report.

“The one area that I think we all need to kind of keep our eye on is the area of repurchases,” Waldron stated. “That is an area that historically the numbers have been great.

“But they’re not nearly as great as they are going to be.”

He said mortgage repurchases soared last year at banks to around $30 billion from just $7.3 billion in 2008.

This year, the rise in repurchases will be even more dramatic.

Waldron explained that 84 percent of 2009’s repurchases occurred in the second half of the year.

“In addition to … Fannie and Freddie, there is going to be pushback fueled by demands from private mortgage insurers and monoline financial guarantors,” Waldron predicted. “These companies are looking to limit their own losses from defaulted mortgages by putting these loans back to loan originators and also by denying claims on mortgage insurance.”


Mortgage Daily Staff


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