Defaults on home loans held by Fannie Mae and Freddie Mac continue to climb, but the two aren't taking the losses lying down. The GSEs' forced banks to buy back $7 billion in soured loans during the first nine months of 2009, and it's the largest lenders that are taking the biggest hit. A growing number of community banks, on the other hand, are seeing interest from discerning buyers for assets already identified as "bad loans," and they're shrinking their nonperforming portfolios by as much as 80 percent with one sale.
President Obama released his budget for fiscal year 2011 on Monday, and as expected, it includes a proposal for a hefty tax on big banks - a fee intended to recoup taxpayer dollars that the government shelled out to pull the financial system back from the brink of collapse. If approved by Congress, the levy would go into effect on June 30, 2010, but it's a touchy subject for the big guys since most of them have repaid their capital injections in full and the Treasury has already said it expects to turn a $19 billion profit from its bailout investments in banks.
Wells Fargo is the nation's top commercial and multifamily mortgage servicer, according to data released by the Mortgage Bankers Association (MBA) Monday, followed by PNC Real Estate and Berkadia Commercial Mortgage. New analysis by MBA also contradicts earlier doom and gloom forecasts regarding maturity levels of commercial real estate loans. The trade group says only about 13 percent, or $184 billion, of the $1.45 trillion dollars in outstanding mortgages held by non-bank investors is scheduled to come due in 2010.
The Federal Housing Finance Agency (FHFA) recently released its monthly Foreclosure Prevention Report, which summarizes loss mitigation activity for Fannie Mae and Freddie Mac. Under the administration's Home Affordable Modification Program (HAMP), the GSEs have initiated 43,000 permanent modifications and 442,500 active trials. FHFA also reported that in 2009, the two companies refinanced more than 4 million loans for struggling homeowners.
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