Follow-up on Freddie Mac’s Loan Repurchase Process
FHFA and Freddie Mac have acted on the concerns raised in FHFA-OIG’s report by adopting a more expansive loan review process. Specifically, Freddie Mac changed its policies to review for potential repurchase claims significantly larger numbers of loans that defaulted more than two years after origination.
It is estimated that the more expansive loan review process will generate additional recoveries ranging from $0.8 billion to $1.2 billion for loans selected for review in 2012 and $2.2 billion to $3.4 billion overall. Because these recoveries had not been anticipated and accounted for, the added revenue will increase Freddie Mac’s profits and hence the amount paid to the U.S Department of the Treasury (Treasury).
Full report below…