Bank Of America Buys Back $330 Million In Loans From Freddie Mac

Posted by Orb Staff on May 24, 2012 No Comments
Categories : Residential Mortgage

11627_bank_of_america Bank Of America Buys Back $330 Million In Loans From Freddie Mac Bank of America Corp. has announced plans to buy back $330 million of home loans from Freddie Mac.

According to a Bloomberg News report, the bank's decision was predicated on the discovery of flaws in the loans' origination process. A Bank of America spokesperson notes that although payments on the ‘vast majority’ of the loans were current, the buyback was enacted "because the valuation method used at origination did not meet the investor's technical requirements."

‘The loans were underwritten using alternative valuation methods that were prohibited for use in the underwriting of the particular types of mortgages involved,’ wrote Brad German, a spokesperson for Freddie Mac, in an email to Bloomberg News. ‘These loans were not subject to any revised loan sampling methodology. While the repurchase transaction followed our normal course of business, we believe the contract violations that triggered it constituted a one-time occurrence by the lender.’

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