The Real Deal Miami

Lenders guard against early defaults

May 28, 2008 02:00PM

Mortgage lenders’ liability for loans is climbing, thanks to 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 them 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.