| In efforts to rectify some of the fallout from the | | | | As a result, banks may suffer losses of up to 7 billion |
| housing crash, Fannie Mae and Freddie Mac have | | | | dollars this year; returned loans will be marked down |
| forced lenders to buy back about 4.1 billion dollars in | | | | to their "true value". This will make the losses for |
| faulty mortgages last year and about 1.3 billion dollars | | | | 2010 mortgage buybacks about $2 billion more than |
| in 2008. While the buy backs have been going on for | | | | last year. The banks that made these loans in the |
| over a year so far, estimated total buy backs for | | | | first place are not pleased that the government, |
| this year may top over twenty billion dollars. The | | | | through Fannie Mae and Freddie Mac, are forcing |
| buybacks of faulty mortgages have been forced by | | | | them to buy back these faulty loans that they have |
| Fannie Mae and Freddie Mac because they bought so | | | | made; but when you consider that these banks are |
| many of the poorly regulated mortgages that banks | | | | the ones which were issuing loans without adequate |
| created for home owners during the housing boom. | | | | requirements, it is hard to be overly sympathetic. |
| Fannie Mae and Freddie Mac are making the banks | | | | According to many mortgage experts, the worst of |
| buy back their faulty mortgages to hold the banks | | | | the loans still in existence are the ones made |
| responsible for loans made with lax requirements to | | | | between 2005 and 2008, over the height of the |
| home buyers who could not actually afford to buy a | | | | housing bubble; hopefully as more of the poorly made |
| home. These poorly regulated mortgages were a big | | | | loans are bought back and more new home loans are |
| cause of the numbers of mortgage defaults that | | | | made with stricter regulations, the housing market |
| helped cause the housing crash. A Freddie Mac | | | | can build up again with a strong foundation of |
| spokesperson stated that part of the reason for the | | | | mortgages for home owners who can actually afford |
| buy backs is that tax payer dollars should not be paid | | | | them. Only time will tell how long the market will take |
| out to cover these loans which should never have | | | | to heal and with it the confidence of consumers. |
| been made in the first place. | | | | |