A brief increase in refinance activity during the first quarter of 2026 pushed the defect rate to a recent high, according to ACES Quality Management.

Repurchases were down nearly 20% compared with the fourth quarter of 2025. Reserves for repurchases also declined. (Includes one data table.)

Lenders are ultimately responsible for the quality and accuracy of appraisals. That means their quality control teams need to review every appraisal to preserve rep-and-warrant protection.

Lenders with high adoption rates for tools from Freddie Mac like automated collateral estimator and asset and income modeler have significantly lower per-loan costs and higher per-loan profits, the GSE says.

The dollar volume of mortgage repurchases by banks declined by 5.4% on a sequential basis during the third quarter. Western Alliance Bank led in loan removals for the second straight quarter. (Includes data table.)

Repurchases and indemnifications increased by more than 30% on a sequential basis during the second quarter. Through the first six months of the year, buyback activity was essentially level compared with the first half of 2024. (Includes data table.)

Some 82 banks and thrifts completed repurchases and indemnifications of residential mortgages during the first quarter of 2025. Repurchase volume was down 16.3% compared with the previous quarter. (Includes data table.)

Fannie’s AI-powered Ask Poli allows quality control personnel to identify frequently researched topics, both within and outside their organization, as a way to forecast current or future loan defects.

For the full year, though, total bank repurchases declined to $1.02 billion, down 23.8% from 2023. (Includes data table.)

Homebuyers appear to have become a little less honest in their loan applications. Lender beware!