As the biggest player in a field of servicing giants, Bank of America Corp. is absorbing the greatest amount of mortgage buyback pain, but some of its problems seem magnified even compared with its size.

At Sept. 30, it had $6.8 billion in outstanding repurchase demands from Fannie Mae and Freddie Mac, or more than half the total the government-sponsored entities have reported in terms of unpaid principal balance.

New claims from the GSEs fell from the second quarter at B of A, as they did at JPMorgan Chase & Co. At Wells Fargo & Co. they have fallen for two consecutive quarters. But the buildup of unresolved demands at B of A appears to be unusual (see charts).

The company accounted for 61% of outstanding claims among the four largest servicers, which include Citigroup Inc., and handled more than two-thirds of industrywide mortgages in the second quarter, according to data from National Mortgage News. That level is out of proportion with its share of the four companies' combined repurchase reserves, or 44%, its share of realized repurchase losses in the first three quarters of this year at 47% and its share of delinquent mortgages serviced for others at 45%. (The last figure was calculated using National Mortgage News figures for delinquency rates in companywide servicing operations for the second quarter, the most recent information available, and applying them to third-party servicing portfolios as of the third quarter.)

The GSEs have identified the failure to reach timely resolutions of repurchase requests as a matter of ongoing concern as the degree of tardiness has increased. At Freddie, the percentage that has been outstanding for more than four months increased by 8 percentage points from the second quarter and 12 percentage points from the year prior, to 32%, in the third quarter.

B of A reported $3.3 billion in new demands from the GSEs in the third quarter, suggesting that about half its $6.8 billion of unresolved claims at the end of the quarter had been outstanding for more than three months.


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