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Hi crackd,

My question, if a 2004 loan performed until the economic collapse in 2008, and then became non-performing leading to foreclosure, could U.S. Bankcorp really be required to buyback, because the original loan did not meet Freddie's 2004 lending standards?
You bet... or, more accurately, Freddie/Fannie/HUD can use their bottomless legal budget to bludgeon a lender to buy back any loans said agencies decide they want to huck back, regardless the reason. The lenders are forced to consider the costs of buyback, versus legal costs to resist. The agencies don't generally huck back single loans at a time, they'll slap a tape full of hundreds or thousands of loans for buyback. Sometimes the lenders fight the most obvious abuse... but we're in ideological times where to be in commerce is to be guilty, by default.

Basically, how can Freddie consider a loan that was consistently paid on time for four years, then as a result of nationwide economic difficulties begin to not perform, be the result of U.S. Bankcorps underwriting ability?
A) You must be assuming the representations & warranties agreements (reps & warrants) were clear, cut & dried, with clear, brightline language in the first place,
B) You must be assuming the gorrilla with the legal fee printing press gives a damn about the language or intent of any prior contractual commitments.

This isn't about economics, law or logic, this is about revenge, blame & punishment.

Dave Donhoff
Leverage Planner
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