Freddie-Fannie Push Bank Bad Debt Cost to $84 Billion: Mortgages

Freddie-Fannie Push Bank Bad Debt Cost to $84 Billion: Mortgages

Fannie Mae and Freddie Mac have expanded efforts to get refunds on soured mortgages, boosting the cost of faulty home loans and foreclosures at the biggest U.S. banks since 2007 to at least $84 billion.

Bank of America Corp., Wells Fargo & Co. (WFC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Ally Financial Inc. (ALLY), set aside almost $3 billion to buy back bad home loans in the first half of 2012, according to data compiled by Bloomberg. Regional lenders including SunTrust Banks Inc. (STI) disclosed at least $1.3 billion of added costs, exceeding their total for all of 2011.

“More and more financial institutions are reporting this and some of those that behaved themselves pretty well during the mortgage cycle are starting to see this happen,” said Blake Howells, an analyst with Becker Capital Management Inc., which oversees about $2.3 billion, including shares in JPMorgan and PNC Financial Services Group Inc. (PNC) “It certainly impairs earnings power.”

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6 Responses to “Freddie-Fannie Push Bank Bad Debt Cost to $84 Billion: Mortgages”
  1. chitown2020 says:

    They never sold the loans, however, they passed them around and over sold investments in them exponentially. That is how they created a quadrillion dollars in debt selling investments in things that are not tangible things, things that don’t exist. An honest bank attorney told me when I told him I am going to ask him for discovery told me, there is no discovery, there is no trust and there is no trustee.

  2. chitown2020 says:

    Most people don’t get the securitized part. What they did was oversell investments in fraudulent securities and fraudulent contracts. They were fraudulent sales and transfers because the Originator never paid the Original loan back to the Treasury. The securitization part to them never happened. What they did was oversell investments in counterfeit securities, the notes and fraudulently induced contracts, the mortgages. Neil Garfield wrote a good article about how securitization is not legal under U.S. and Common Law. That is why they did not securitize their fraud to themselves but they want us to believe their fraud is securitized to us. They are masterful counterfeiters. Even in the fraudclosures they are uttering forged instruments with no legal claim. Being granted fraudclosures with no proof of payment for the Original loan is counterfeiting. It is RICO.

  3. mary says:

    How can they buy back, if they were alleged to be turned into securities??

  4. Mystify says:

    It’s time to let this ship sink! No more bailouts, do not sign on the dotted line, so not pass go, just stop the madness. Time to let things fall where they may will it be painful, yes but in the end we will be better for it.n read creature from Jekyll island and you will read this is Daja vu same as the first depression but this time the banksters are taking allmthe money. It is time to fight and end the fed!

  5. 1ofthemany says:

    Shouldn’t that depiction state “The People are propping them up until investor confidence returns” so many forget WE are Uncle Sam via taxation and “illegal manipulation” (i.e Fraud) known more-so these days as laws.

  6. Mary says:

    Is that what they did with Goldman regarding the toxic loans in the securitized trusts?? What happens to the loans in say: GSAMP2007HE2?

    Anybody got an answer for that?

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