Buyback Offshoot: GSEs are Hiking Oversight of Performing Loans

Fifth Third Bank reported that demands by Fannie Mae and Freddie Mac to repurchase bad loans have slowed, but the seller/servicer is seeing what it calls an “uptick” in file reviews by the GSEs on performing mortgages.

“These reviews are not repurchase demands,” the bank’s chief operating officer Daniel Poston stressed during a Friday conference call on the company’s fourth quarter financial results.  

He noted the GSEs are reviewing files of performing loans where the borrowers are current on their payments. “So, we don’t currently expect to see any significant increase in recognized losses” associated with those file reviews, Poston said.

In the fourth quarter, the Cincinnati bank realized $17 million in repurchase losses, compared to $23 million in 4Q 2010. The regional bank also added $20 million to its repurchase reserves.

Outstanding GSE repurchase demands totaled $47 million as of December 31, down from $150 million in the fourth quarter of 2010.

Fifth Third Bank reported $1.3 billion in net income for all of 2011, compared to $753 million the year prior. “The low rate environment generated significant refinancing activity,” Poston said. 

The bank’s mortgage unit funded $7.1 billion of single-family loans in 4Q, compared to $4.5 billion in 3Q.

Among residential funders, Fifth Third’s mortgage division, which is headquartered in Cincinnati, ranks 14th nationwide, according to figures compiled by National Mortgage News, and the Quarterly Data Report.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_521/gses-oversight-performing-loans-1028466-1.html

Leave a Reply

WP Facebook Auto Publish Powered By : XYZScripts.com
Bunk Beds