Re: any merit to this commentary?
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Except they have to buy them back if they turn out to be non-performing within a certain period of time. Plus they had to move a billion in mortgages that they couldn't dump from their "held for sale" portfolio to their "held for investment" portfolio in the first half of the year.
Etrade has been increasingly getting into the mortgage biz. The mortgage revenue was more than the brokerage revenue in the last earnings.
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Their buyback obligations are usually very limited, typically mortgages where the first payments are missed or where they dont meet underwriting standards such as the credit rating was below range or the documentation is missing.
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Or if there is fraud. Oops.
J
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Yes but they aren't talking about people exagerating their salaries on a stated income loan. As I said it's rare. One i looked at had to reserve $2m to buy back loans out of a billion dollar loan sale. There are another $4m in claims they say they won't have to buy. Thats tiny in proportion to the trust.
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