By Zachary A. Goldfarb
Washington Post Staff Writer
Tuesday, November 24, 2009
Freddie Mac, the government-backed mortgage finance giant, said Monday it's trying to minimize losses on more than $1 billion in assets at risk because of the summer collapse of mortgage lender Taylor, Bean & Whitaker and a regional bank with which it did business.
McLean-based Freddie Mac said it filed a petition to claim about $595 million that Taylor Bean had collected on its behalf and placed on deposit at Colonial Bank, an Alabama-based bank that was shut by regulators in early August, a few weeks before Taylor Bean filed for Chapter 11 bankruptcy protection.
Colonial Bank is now in the hands of the Federal Deposit Insurance Corp. For a fee, Taylor Bean collected the monthly payments on home loans that were owned by Freddie Mac.
Freddie Mac also reiterated on Monday that it is due $500 million for home loans that Taylor Bean had sold the company with the promise that it would buy them back if they didn't meet Freddie Mac's standards. Freddie Mac says the loans did not pass muster and wants to sell them back, but Taylor Bean's bankruptcy prevents the sale.
It is not clear what the price tag associated with the collapse of Taylor Bean and Colonial Bank will ultimately be for Freddie Mac.
"Freddie Mac is currently assessing its other potential exposures to [Taylor Bean] and is working with the debtor in possession, the FDIC and other creditors to quantify these exposures," the company said in a statement. "At this time, Freddie Mac is unable to estimate its total potential exposure related to [Taylor Bean's] bankruptcy; however, the amount of additional losses related to such exposures could be significant."
Freddie Mac earlier this month posted a $5 billion loss for the third quarter, but said for the second time in a row that it didn't need any more federal aid. Freddie Mac and its rival, Fannie Mae of the District, have received $111 billion in aid since the government seized the firms in 2008.
Fannie Mae also did business with Taylor Bean but the company said it has reported the extent of its exposure.