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Freddie Mac to Expand Mortgage Repurchase Claims

On the heels of the ""Federal Housing Finance Agency's (FHFA's)"":http://www.fhfa.gov/Default.aspx announcement of its ""revised representation and warranty guidelines,"":https://themreport.com/articles/new-rep-warranty-guidelines-bring-certainty-transparency-2012-09-11 comes news that ""Freddie Mac"":http://www.freddiemac.com/ will be increasing its repurchase claims in the near future.

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The revised rep and warranty guidelines were designed to provide more clarity in the market, but in the meantime, the ""FHFA Office of Inspector General (OIG)"":http://www.fhfa.gov/Default.aspx?Page=122 reports Freddie Mac will increase repurchase requests to between $0.8 billion and $1.2 billion this year and between $2.2 billion and $3.4 billion overall.

In the past Freddie Mac has generally reviewed loans that defaulted within two years. However the FHFA OIG suggests the GSE should also review loans that default within two or three years after origination, according to report released Thursday by ""FBR Capital Markets."":http://www.fbr.com/

FBR reports it is likely much of the repurchase claims will go to Bank of America, which reached a settlement with the OIG regarding put-back claims last year.

However, Freddie Mac's new repurchase claims will reach other institutions as well.

FBR believes ""it is likely that banks have reserved for this anticipating Freddie Mac would ultimately be as aggressive in repurchase claims as Fannie Mae.""

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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