US Bancorp: Freddie Mac raises demands for banks to take back sour mortgages
In a MarketWatch article, chairman and chief executive Richard Davis of U.S. Bancorp (USB) told investors that Freddie Mac is raising demands to banks to repurchase certain defaulting mortgages that were sold to both government-sponsored enterprises.
Freddie Mac informed U.S. Bancorp and other banks during the Goldman Sachs (GS) Financial Services conference that the GSE would demand banks to take back defaulting mortgages made in 2004 and 2005. Previously, both Fannie Mae and Freddie Mac only demanded banks to take back mortgages made in 2006 or later.
Here's a bit from the article
"U.S. Bancorp will add to its reserve for such repurchases in the fourth quarter to provide for a potential increase in losses from mortgage putbacks. The increased reserve will slice one to two cents off the bank's earnings per share, Mr. Davis said."