GSE Settlement May Pressure Other Banks

Bank of America’s agreement to buy back bad loans it sold to Fannie Mae and Freddie Mac may put pressure on other banks to settle with the government-sponsored enterprises, according to MF Global, reports Housing Wire.

Bank of America’s agreement to buy back bad loans it sold to Fannie Mae and Freddie Mac may put pressure on other banks to settle with the government-sponsored enterprises, according to MF Global. Analysts warned, however, that the settlement—under which the bank will pay only 39 cents on the dollar—involves only conforming whole loans, and that a battle over the larger, private-label mortgage-backed securities still looms.

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