Freddie Mac believes its caseload of loan buyback requests from seller/servicers has already peaked, but Fannie Mae thinks its repurchase requests will continue to rise.
Freddie recovered $1.7 billion in the third quarter from buybacks, compared to $1.4 billion in 2Q. However, outstanding requests for buybacks were unchanged quarter-to-quarter at $5.6 billion.
Officials from both companies spoke about their buyback caseloads before a Senate panel earlier in the week. (The hearing addressed servicing issues.)
Testifying before the Senate Banking Committee, Freddie executive vice president Donald Bisenius said the number of seriously delinquent loans at the company is stabilizing and requests for buybacks are shrinking. "We have worked through a huge pipeline of mortgage reviews and mortgage re-purchase requests over the last two years. We are at the peak today and it has been declining over the past few quarters," the servicing executive said.
In 3Q Fannie also collected $1.7 billion from lenders that repurchased loans, up from $1.5 billion in the second quarter. "We don't see that pace slowing down," Fannie servicing EVP Terence Edwards told the senators.
He noted Fannie is about 40% through the mortgage review and re-purchase process. "We have another 60% to go," he testified. Fannie had $7.7 billion in outstanding repurchase requests as of September 30.
