Repurchasing loans will be an ongoing problem for banks as F&F try to shirk their responsibilities.
Resumption of lending by banks just got set back months, if not years. No bank can risk making a loan with scarce reserves when they might be needed to buy back loans.
* * * * * J B K * * * * *
San Francisco
March 5 (Bloomberg) -- Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages.
That's the estimate of Oppenheimer & Co. analyst Chris Kotowski, who says U.S. banks could suffer losses of $7 billion this year when those loans are returned and get marked down to their true value. Fannie Mae and Freddie Mac, both controlled by the U.S. government, stuck the four biggest U.S. banks with losses of about $5 billion on buybacks in 2009, according to company filings made in the past two weeks.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJcAMaiuifjc&pos=4
