The Real Deal New York

Lenders guard against early defaults

May 28, 2008 12:34PM

Mortgage lenders’ liability for loans is climbing, thanks to loan provisions with investors that require lenders to take back loans that default too quickly or are mismanaged. Lenders are now looking into provisions that protect themselves from fraud and early defaults. Countrywide Financial, the nation’s largest mortgage lender, reported that its estimated liability for claims reached $935 million by March 31, up from $365 million a year ago. In the first quarter, Countrywide also took a charge of $133 million for claims that it paid. 

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