FHFA says Freddie Mac could have done more, recovered more money from banks selling defective mortgages; firm currently reviewing procedures for handling defective loans
September 27, 2011
– Freddie Mac is reassessing its mortgage loan-reviewing procedures after the Federal Housing Finance Agency’s (FHFA) inspector general said the firm could have recovered more money from banks that sold defective loans, Bloomberg reported Sept. 26.
Loan-repurchase agreements have been suspended until the FHFA and Freddie Mac determine a better way to discover more defective loans.
According to the report, the inspector general considered this issue critical to recovering substantial amounts of ill-managed dollars for the mortgage-finance firm and taxpayers.
Auditors from the FHFA and the firm brought up concerns last year over its loan-review process, but told executives and the board that looking into a greater number of loans would increase the money recovered from banks.
The primary source of this article is Bloomberg, New York, New York, on Sept. 26, 2011.