Lender’s ‘Technical Error’ Leads to Prepays on Certain MBS

Recently announced prepayments pending on certain Freddie Mac securities stem from what the lender involved said is a resolved technical error that caused a buyback of $330 million in mostly current loans.

Some analysts at Barclays said in a report that the pools were originated entirely by Bank of America in 2010 and 2011.

A Bank of America spokesman said in an email that a disclosure Freddie released on the prepayments “ties to a small number of loans ($330 million UPB), the vast majority of which are current.

“Bank of America has agreed to repurchase [these] from Freddie Mac due to technical requirements,” he said. “The issue has been corrected.”

When asked about the cause, a Freddie Mac spokesman said, “Repurchases can be triggered by a number of different issues.”

He said he could not otherwise comment outside of what was in the release or about comments Bank of America had made about them.


Article source: http://www.nationalmortgagenews.com/dailybriefing/freddie-mac-prepays-barclays-1030600-1.html

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