by Calculated Risk on 5/27/2008 08:25:00 PM
Tuesday, May 27, 2008
From Ruth Simon at the WSJ: Investors Press Lenders on Bad Loans
Unhappy buyers of subprime mortgages, home-equity loans and other real-estate loans are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans. The pressure is the result of provisions in many loan sales that require lenders to take back loans that default unusually fast or contained mistakes or fraud.Tanta and I were discussing who the eventual bagholders would be way back in 2005 - while the bubble was still inflating - and although the picture is much clearer today, some bagholders still don't want to be, uh, bagholders! And who could blame them?
The potential liability from the growing number of disputed loans could reach billions of dollars ...
Posted by Calculated Risk on 5/27/2008 08:25:00 PM