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Repurchase claims squeezed subprime lender

San Diego Union-Tribune--When Accredited Home Lenders filed for bankruptcy on May 1, it signaled the final demise of San Diego's most direct link to the subprime mortgage meltdown that sparked a nationwide financial crisis.

...Although these buyback claims played a role in the downfall of subprime lenders, they were not the top cause, said Mark Riedy, executive director of the Burnham Moores Center for Real Estate at the University of San Diego.

“It's a piece of the puzzle,” Riedy said. “It's not the thing that brings them down.”

Riedy said subprime lenders have been hurt most because, with investors being scarce, they now must keep the loans they make.

Financially healthy subprime borrowers usually refinance out of the loans pretty quickly, so what remains are mostly troubled loans from borrowers who can't qualify for refinancing.

“So the losses are probably greatest for the loans in their own portfolio,” Riedy said. (Full Story)