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Volume 14 - Number 18

September 5, 2014

Freddie Should Expand Reviews of Servicer Reimbursements, Says IG

Although Freddie Mac’s official watchdog found the GSE’s review process of servicer reimbursement claims to be “generally effective,” some tens of millions of dollars could be saved by scrutinizing servicer payments for costs incurred on loan defaults. According to an audit issued last week by the Federal Housing Finance Agency’s Inspector General, Freddie reimbursed 460 of its servicers $1.4 billion in 2013 but identified and denied $126 million in what the IG calls “erroneous” claims. The IG noted that Freddie’s top 10 servicers, relative to total reimbursements, accounted for 87 percent of all reimbursements made by Freddie in 2013.

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With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

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