Fannie does not disclose buyback information. However, Freddie Mac forced its seller/servicers to buy back $960 million in bad mortgages in third quarter. Ginnie Mae and Federal Housing Administration also require buybacks and indemnifications on bad loans.
In total Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter.
Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan Chase and Bank of America. Chase repurchased $2.7 billion in defaulted loans and Bank of America repurchased $2.3 billion to satisfy investor demands. Both are on the hook for troubled loans they took control of when they purchased ailing mega-thrifts — Countrywide in the case of Bank of America and Washington Mutual by Chase.
The FDIC information also lists buybacks by Citibank $898 million, National City Bank $361.6 million, Wells Fargo Bank $266 million and SunTrust Bank $232.3 million.
Investors like Fannie Mae and Freddie Mac can require lenders to buy back defaulted loans that don't comply with their underwriting requirements.
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