Mortgage bankers lament loan repurchase woes
Demands that U.S. banks repurchase faulty loans made during the housing boom emerged as one of the most sensitive topics for mortgage bankers at a conference on Monday, with one executive urging the industry to push back harder. Banks over the past year have been under siege from the demands, primarily at the hands of U.S. mortgage funding giants Fannie Mae and Freddie Mac. Shares of some banks have come under pressure due to speculation the costs associated with loan repurchases will rise. The demands for the banks to buy back mortgages are typically based on violations of so-called representations and warranties, used by lenders to assure investors of that all aspects of the loan are as stated. The lax enforcement of such standards led to folly, or fraud, in lending during the boom, analysts said.