U.S. Banks May Face $180 Billion in Loan Buybacks, Fitch Says

Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. might face demands to repurchase as much as $180 billion of troubled mortgages from Fannie Mae and Freddie Mac, Fitch Ratings said.

At the end of June, the two government-sponsored loan guarantors held a total of $355 billion of troubled mortgages in their portfolios, of which half were serviced by the four banks, the largest in the U.S., Fitch wrote in a report. While it is “conceivable” that debt eligible for repurchase may surpass $175 billion in “an extremely adverse scenario,” the banks are more likely to face lesser demands, depending on foreclosure rates and loan documentation.