PNC Adds $350 Million To Reserves Following Buyback Demands

11770_moneywall PNC Adds $350 Million To Reserves Following Buyback Demands Pittsburgh-based PNC Financial Services Group Inc. is adding $350 million to its reserves in the second quarter following requests that the company buy back its troubled mortgages.

Reuters reports that PNC executives told an investor presentation that they were receiving numerous requests for loan buybacks from one of the government-sponsored enterprises. The loans in question were originated between 2005 and 2008, and the majority of the complaints concerning these loans focused on missing documentation and declining property values. The loans were included in mortgage-backed securities, but investors have raised concerns that the loans were already problematic at the time they were securitized.

‘Barring some significant change in the future behavior and the demand patterns of the investors, we believe that we will be appropriately reserved for this change in the trend,’ said PNC CEO Jim Rohr, who adds that the $350 million addition to the company's reserves will result in year-to-date accrued losses of $1.6 billion.


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