Freddie Mac has released a statement that Bank of America will be repurchasing $330 million loans out of its Freddie pools because of reps and warrants contractual issues.

GSE buyouts are typically conducted by the agencies themselves and usually impact 120+delinquent loans, JPMorgan Securities analysts said in a report released yesterday afternoon.

This is not the same since BofA was requested to repurchase “defective” loans even if they are still current. 

In the past, repurchases demands have been typically focused on seriously delinquent loans, JPMorgan analysts said.

The buyouts will be seen in the May paydowns, which will be reported in early June, they added.

Freddie has published a list of around 200 CUSIPs that are the most severely affected with 5% or more that are subject to buyout. This list has $1 billion in current face from which roughly $100 million will be repurchased causing one-month speeds averaging roughly 70CPR on these affected pools.

They said that these pools are mostly post HARP, ’09-’11 origination 30-year 4s, 4.5s and 5s. Another $230 million of repurchases will be spread out among a greater universe of Freddie pools.  

Generally, analysts said these BofA buyouts will have a minimal effect on post-HARP Freddie cohort speeds, which is equivalent to $330 milion out of $575 billion or <1CPR, analysts explained.

It will have a modest impact on post-HARP Freddie BofA speeds, which mean $330 million out of $50 billion or 7-8 CPR. 

According to the disclosed pool characteristics, analysts said the affected collateral has a mix of low and high LTV loans. Borrower FICOs are also generally fairly high, they said.

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