Agency forces JP Morgan Chase to buyback huge number of mortgages

‘The value of JP Morgan Chase’s real estate owned (REO) assets â€” insured by government agencies â€” nearly tripled since the 2nd Quarter of 2009, due to a large increase in the rate of mortgage buybacks from Ginnie Mae mortgage-backed securities (MBS)’

I believe this could be a strong trend for years – Fannie, Freddie and Ginnie kicking back mortgages to the banks who originated them and misrepresented them.

Four banks control about two-thirds of the mortgage industry – JP Morgan Chase, Citigroup, Bank of America and Wells Fargo – so they are at high risk if this trend continues.

Will this forced buyback trend affect the supply of REOs listed for sale in metro Phoenix? It seems like it could but I just don’t know.

Also see, article on Bank of American mortgage repurchases.

August 6, 2010 by Realtor John Wake

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John Wake

Born in Phoenix, trained as an economist and now a licensed Realtor, John uses hard data from the real estate market to help his clients -- buyers and sellers of residential real estate -- uncover their best choices for finding the right home or finding a buyer for their current home.

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